First Home Buyer Lending at Decade High

First home buyer loans hit the highest rate since 2009 with 10,086 commitments made in December.

The First Home Loan Deposit Scheme is expected to further boost this result from the latest Australian Bureau of Statistics report.

First home buyers accounted for 30.2 per cent of all owner-occupier commitments excluding refinancing with NSW recording 2,423 home loan commitments, Queensland 1,846 while Victoria had 3,589.

Owner-occupiers drove the demand for new home loans in December with commitments up 4.4 per cent to $19.64 billion.

Owner-occupier commitments rose 5.1 per cent compared to investors at 2.8 per cent for the month-on-month data.

ABS December 2019 New Loan Commitments

ABS chief economist Bruce Hockman said first home buyer activity was subdued earlier in 2019 before picking up.

“Strong growth in the value of new loan commitments for housing during the second half of 2019 has seen the series increase 20.7 per cent from the most recent low point in May 2019,” Hockman said.

“New loan commitments for owner occupier housing was the predominant driver of this growth, up 22.8 per cent since May 2019.

“The value of new loan commitments for investor housing, while tracking upward over the past six months, remained down on the March 2017 peak.”

BIS Oxford Economics principal economist Tim Hibbert said they expect first home buyer demand to rise in March quarter 2020.

“Price growth in Sydney and Melbourne continues to run strong, with Australia’s other major cities starting to join the party,” Hibbert said.

“With property turnover on the up, the outlook for total housing loan demand looks strong for 2020.”

REIA president Adrian Kelly said the value of loans for housing continued to be positive.

“The finance commitments for December reflect a continuing interest and boost in confidence in all buyer segments of the real estate market at the close of 2019,” Kelly said.

“With the introduction of the First Home Loan Deposit Scheme in January 2020 we can expect a pick up in the January figures as well.”