The Housing Industry Association (HIA) have released statistics that show just how much of Australia’s property boom has been driven by First Home Buyers.
The peak body said that 41% of all new home loans were issued to those making their first step onto the property ladder in the month of March.
First home purchases were up 261.6% in Western Australia and 202.7% in Tasmania, tripling previous numbers. In all other states except New South Wales, they were up over 100%, and in NSW, they were 79.1%.
The numbers represent the highest proportion of the market that the First Home Buyer cohort has enjoyed since the time immediately after the Global Financial Crisis, when government stimulus helped to get many onto the market.
The post-pandemic stimulus at Federal level has had a similar effect, though as the HomeBuilder scheme has now ended, there is now the question regarding how sustainable the current numbers are.
“HomeBuilder has brought forward a lot of first home buyer activity,” said HIA Chief Economist Nicholas Ward. “First home buyer activity is likely to decline in the coming months.”
The tree changer effect here – where people who were renters in the cities are now becoming owners in regional areas – may be at play in rising numbers of First Home Buyers being active in the market, especially in areas such as Tasmania, the Northern Territory and Queensland, which were already established locations for tree changers before COVID.
“Migration data released yesterday by the ABS confirms that many Australians chose to leave Melbourne and Sydney for other parts of the country during COVID,” confirmed Ward.
Also notable was a rise in renovation financing, which has reached its highest level since 2009, and is predicted to continue in 2021.
“Renovations are booming because people have spent more time at home under COVID, and have drawn on savings that would otherwise have gone to overseas holidays and restaurant meals,” said Ward. “Renovations have also been supported by the Government’s HomeBuilder program.”