First home buyers surge in property market, report finds
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More than one in three home loans are now being issued to first home buyers, according to new data from the Australian Bureau of Statistics (ABS).
The Housing Industry Association (HIA) reports that loans to first-time buyers made up 35.4% of the overall home buying market in July 2024, exceeding the historical average of 30%.
HIA Economist Maurice Tapang said the figures indicate strong demand among aspiring homeowners.
“First home buyers have been resilient in this cycle, with the number of loans issued to this group increasing by a further 0.8 per cent in the month of July to 9,990,” Mr Tapang said.
The number of loans to first home buyers in the three months to July 2024 was 6.4% higher compared to the same period last year.
Mr Tapang attributed the increase in home buying confidence to a pause in interest rate rises, with no increases for ten months.
The data also showed a significant rise in investor activity, particularly in new home construction.
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“The number of loans issued to investors building new homes in the three months to July 2024 rose by 26.7 per cent compared to the same time in the previous year,” Mr Tapang said.
He dismissed the notion that investors compete with first home buyers, stating that both groups can be active in the market simultaneously.
Overall, loans for the purchase or construction of new homes increased by 16.8% in the three months to July 2024 compared to the previous year.
Mr Tapang expects owner-occupiers to follow the trend as confidence returns to the market.
“It is expected that owner-occupiers will follow suit, which will see more of them flow into the new home market amid a return of confidence and certainty with build costs and timeframes,” he said.
The report showed variations across states and territories, with Victoria experiencing the largest increase in first home buyer loans at 13.9%, while the Australian Capital Territory saw a decline of 5.2%.