Amidst a climate of financial caution, the Real Estate Institute of Australia (REIA) President, Mr Hayden Groves, acknowledges a surge in first home buyers and investors based on the latest Australian Bureau of Statistics (ABS) Lending Statistics. Nevertheless, he continues to advocate for restraint from the Reserve Bank of Australia (RBA) when it comes to further interest rate increases, especially considering the ongoing struggles in new housing tied to the uncertainty of building costs.
Mr Groves points out, “The latest ABS figures show first home buyers grew by 0.3 per cent in October, 6.8 per cent higher compared to a year ago.” There was also a marginal increase in the average loan size for first home buyers—from $506,000 to $507,000—while loan sizes for all owner-occupiers experienced a more significant uptick of 2.1 per cent in October.
Delving into the broader stats, he notes that “Overall, total housing rose 5.4% to $26.7 billion, after a rise of 1.5% in September and was 4.9% higher compared to a year ago. Investors made up for $9.5 billion and was 12.1% higher compared to a year ago.”
However, it’s not all positive growth, as Mr Groves emphasizes the discrepancy in housing sector performance. While there’s been an increase of 4.6% for the purchase of existing dwellings and a 5.2% year-over-year rise, the construction of new dwellings paints a more concerning picture, rising by 9.1% but being a stark 19.5% lower than the previous year. “These figures indicate home buyers are still not feeling surety around building costs remaining stable,” Mr Groves expressed.
The takeaway from the statistics seems to be clear, as two key market segments show increased activity. However, the REIA President cautions that the Central Bank should avoid gambling on another rate rise, expressing that “the added cost is putting a halt to new supply,” which could have a lasting impact on the housing market’s trajectory.