Borrowing among first-home buyers has rebounded over the past year, due in part to relaxed investor activity and attractive incentives in New South Wales and Victoria, according to Cameron Kusher, head of research at CoreLogic.
“The Australian Bureau of Statistics’ (ABS) housing finance data includes data on first-home buyer housing finance commitments, specifically for owner-occupiers,” Kusher said. “Over recent years, first-home buyer activity has generally been tracking below average, however, each state and territory offers some level of incentive to first-home buyers including grants and tax concessions.
“Over recent years, some states and territories have increasingly offered stamp duty reductions for buyers with these going live last year in NSW and VIC. As a result of these incentives and a slowdown in investor demand, activity from the first-home buyer segment has climbed over the past year.”
Because the data isn’t seasonally adjusted, it does not reflect seasonal effects, particularly early in the year. Nationally, there were 8,782 housing finance commitments in February of this year. Although the volume of loans was down in late 2017, it was 33.1% higher than the previous February.
“As a share of all owner-occupier commitments, first-home buyers accounted for 17.9% in February 2018 compared to 13.3% the previous year,” Kusher said.
New South Wales
In February 2018, there were 2,246 first-home buyer housing finance commitments, compared to 1,105 in the previous year (an increase of 103.3%). Since last year, stamp duty concessions have been available, and over the past eight months there have been 18,400 commitments compared to 10,857 over the previous eight months.
”First-home buyers now account for 15.1% of owner-occupier finance commitments, up from 7.5% a year earlier. The 15.1% is the greatest share since October 2012,” Kusher said.
Victoria
There were 2,619 financial commitments to first-home buyers in February 2018—38.6% higher than a year earlier. Victoria also saw stamp duty exemptions go into effect in July 2017.
“From the end of June there have been 23,996 first-home buyer commitments compared to 17,522 over the previous 8 months. First-home buyers accounted for 18.3% of commitments compared to 13.9% a year earlier,” Kusher said.
Queensland
Over the month, there were 1,839 first-home buyer housing finance commitments, which was only marginally higher from a year ago (+3.8%). “First-home buyers accounted for 19.3% of the market in February 2018 compared to 17.6% a year earlier,” Kusher said.
