States, regulator boost for first buys

FIRST home buyers are regaining a foothold in the housing market, enjoying their biggest share of new mortgages in almost five years.

The Federal Government will welcome the news, having made housing affordability a key part of the May Budget, but its initiatives, such as the first home super saver, are only being introduced to the Senate next week.

Instead, it is the stamp duty savings for first home buyers introduced by the NSW and Victoria governments that appear to be making their mark. The banking regulator, the Australian Prudential Regulation Authority, in April introduced restrictions on investor loans.

“First home owners have also been brought back to the market due to the large supply of apartments that are being completed,” Housing Industry Association principal economist Tim Reardon said.

“This is a very positive sign of a healthy market.”

Housing finance figures for September highlighted the changing dynamics.

First home buyers accounted for 17.4 per cent of all mortgages granted in the month, the largest proportion since November 2012. September was the seventh consecutive month of growth.

The value of investor housing loans tumbled 6.2 per cent, while owner-occupier mortgages declined 2.1 per cent.

“Overall, the updates bring the finance approvals data more into line with the clear slowing signal evident from turnover, auction markets and prices,” Westpac economist Matthew Hassan said.

Another positive result in yesterday’s figures was a 1.8 per cent increase in the number of loans granted for new properties to 3206 in September. Commonwealth Securities estimated this was a 38-year high.

“The outlook for Aussie home building remains encouraging,” CommSec senior economist Ryan Felsman said.