The revival of first home buyer activity across Australia, in one chart

Photo: Patrick Riviere/ Getty Images.
  • The proportion of owner-occupier loans going to Australian first home buyers at the highest level in five years.
  • The share of loans to first time buyers is lifting across all states, including in NSW and Victoria.

After being slowly pushed out by affordability constraints, elevated levels of youth unemployment and weak wage growth over recent decades, first home buyers are returning with force to Australia’s housing market.

According to data released by the Australian Bureau of Statistics (ABS) this week, the proportion of owner-occupier loans going to first home buyers rose to 18% in January, the highest proportion since October 2012 and well off the record low of 12.9% set in October 2015.

While this largely reflects recent stamp duty concessions introduced by the New South Wales and Victorian state governments last year to help improve housing affordability for first home buyers, as seen in this chart below from CoreLogic, it’s not just those states where first home buyer activity is increasing.

It’s across all of Australia’s states and territories.

Source: CoreLogic

Lower mortgage rates, prior incentives in other states and slowing house price growth, partially driven by less investor activity as a result of recent restrictions on interest-only lending from APRA, go some way toward explaining the recent lift in loans going to first home buyers.