The latest housing finance figures released by the Australian Bureau of Statistics (ABS) show that first-home buyers are returning to the market as finance approvals for investor housing trend downward, according to the Real Estate Institute of Australia (REIA).
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“The proportion of first-home buyers, as part of the total owner-occupied housing finance commitments, increased to 15 per cent and is the highest since February 2014,” REIA President Malcolm Gunning said.
“The number of first-home buyer commitments increased by 1.6 per cent for the month, following a 28.9 per cent increase the previous month and is the highest since October 2014.
“By contrast, the value of investment housing commitments decreased by 0.9 per cent in June in trend terms, following falls in the previous two months and is well down from its 2015 peak.
Kenny and Hannah Wisse have just entered the property market, buying their first home in the past week.
“For us, we’ve wanted to get into the market, but couldn’t because deposit requirements were insane and the government had removed the first-home owners grant on existing property, effectively pulling us out of the market,” Mr Wisse said.
“We had banked on saving x and getting x and that be sufficient to cover our deposit, so when they took that away it pulled us out of the market.”
The latest budget concessions managed to throw the Wisses a lifeline.
“We have purchased a home in Orange, NSW. Given where Orange is - statistically growth has been pretty slow – but growth has started to hit the Orange market with overflow from Sydney.”
The couple plan to get some capital growth out of their current property before attempting to enter a more competitive market in the near future.
The Wisses decided that continuing to save a deposit would not give them the return they needed, so they hope purchasing a home in a softer, regional market will give them the gains they need to make their way up the property ladder.
Mr Gunning said that overall the figures for June 2017 show that the number of owner-occupied finance commitments decreased by 0.2 per cent. However, if refinancing is excluded, in trend terms the number of owner-occupied finance commitments increased by 0.3 per cent – the 10th consecutive month of increases.
“The June figures show that the market is adjusting with owner-occupiers and first-home buyers returning to the market as investor activity decreases in response to the actions of the regulators and banks to limit bank lending to dampen investor demand for property,” Mr Gunning concluded.
