First home buyers prefer two states over the rest

by Maya Breen16 Mar 2015
New data reveals the different activity of first home buyers across the country.

New research from Mortgage Choice has shown first home buyers are putting down roots in some places more than others, with Queensland and Western Australia being the preferred states with most FHB activity.

Queensland and West Australian first home buyers accounted for almost one in five loans written throughout the month of February, according to Mortgage Choice’s recent new home loan approval data.

Along with Queensland and Western Australia, Victoria was also high, with FHB participation rates of 17.00%, 19.57% and 16.99%, respectively.

In contrast, New South Wales saw FHB claim less than one in every 20 loans written and Mortgage Choice spokesperson Jessica Darnbrough says there are many reasons for the different FHB behaviour between the states.

“New South Wales has the smallest percentage of first home buyers entering the market,” Darnbrough said.

“That said, this is largely unsurprising when you consider that the state’s capital, Sydney, boasts the country’s highest median dwelling price.”

New RP Data research shows Sydney’s median dwelling price is currently $680,000, which is $150,000 higher than Darwin.

Darnbrough said that NSW no longer offering grants or stamp duty concessions to first home buyers purchasing an established property, also factored into its low percentage.

The Mortgage Choice data showed more than 70% of first home buyers who purchased their property within the last two years bought an established dwelling.

"It isn’t surprising to see first home buyer participation stronger in the states that not only offer concessions or grants to those looking to purchase an established dwelling, but those states boasting a lower median dwelling price,” Darnbrough said.

FHB participation was low in South Australia, making up 4.68% of all loans written but looking ahead, Darnbrough said the country should start to see a slight pickup in the level of first home buyer activity as low interest rates combined with moderating property price growth lures these buyers into the market.