First home buyers drive lending

THE August 2017 housing finance figures released last week by the Australian Bureau of Statistics (ABS) show first home buyers are returning to the market due to increased stability, according to the Real Estate Institute of Australia (REIA).

“The proportion of first home buyers, as part of the total owner-occupied housing finance commitments, rose to 17.2 per cent and is the highest proportion since July 2013,” REIA president Malcolm Gunning said.

“The number of first home buyer commitments increased by 14% for the month and is the highest since December 2009.

“By contrast, the value of investment housing commitments decreased by 0.2% in August in trend terms following falls in the previous three months and is well down from its 2015 peak.

“Overall the figures for August 2017 show, in trend terms that the number of owner-occupied finance commitments increased by one per cent.

“If refinancing is excluded, in trend terms, the number of owner-occupied finance commitments increased by 1.3% and is the eleventh consecutive month of increases.”

In trend terms increases were recorded in all states and territories except South Australia and the Northern Territory.

The Australian Capital Territory had the largest increase of two per cent.

In Victoria and New South Wales, where new incentives for first home buyers came into the effect on July 1, 2017, the increases in owner occupied housing commitments was 1.4% and 1.3% respectively.

The Northern Territory had the largest fall at 1.4%.

“In trend terms, the number of established dwellings purchase commitments increased by 0.9% while new dwelling construction increased by 1.5% and the purchase of new dwellings rose by 2.1%,” Mr Gunning said.

“It is pleasing to see that of the 1526 increase in loans in August, 1264, or 82.8%, were to first home buyers.

“The figures show that the market is adjusting to more stable conditions with owner occupiers and first home buyers returning to the market.”