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First home buyer interest surges in 2019


Couple standing proudly in front of their property.

As the property market slides, traffic to Finder's first home buyer pages jumped 60% in the new year.

An analysis of Finder's traffic data clearly shows that hopeful Aussie home buyers are doing their research.

Traffic from 1 January 2019 has more than doubled across our guides on stamp duty, first home owner grants, borrowing power, mortgage advice for first home buyers and information on guarantors.

The new year is always a busy time in the property market. As holidays end and people make big financial resolutions for the year ahead, buyers start looking at their finances and scoping out the market.

But with prices falling in many major cities, 2019 could be a very big year for first home buyers.

The property market has been declining in some cities for more than a year

Property prices fell in Sydney and Melbourne throughout 2018 and had a weak start in 2019 too.

  • Sydney prices have fallen to July 2016 levels.
  • Melbourne prices have fallen to January 2017 levels.
  • Prices have fallen 3.5% across all Australian capitals (although regional areas have risen).

Will 2019 be the year of the first home buyer?

The data suggests that it will be a good year for people looking to enter the market for the first time.

But research and interest doesn't always translate to action. It's worth keeping in mind the following points:

  • Prices are down but housing affordability is still a major issue. Prices are still high and wage growth simply hasn't risen high enough to compensate.
  • Mortgage lending is down across the board. Overall, fewer people are getting loans to buy homes or investments. But the proportion of borrowers who are first home buyers is growing.
  • Lenders are getting stricter on eligibility. The royal commission has pushed lenders toward more careful lending.
  • Interest rates are rising. Many lenders have hiked rates in 2019 already, with more likely to follow.

In other words, it seems that first home buyers could be a growing portion of an overall shrinking pool of borrowers as the property market continues to contract.

Time will tell just how many first home buyers enter the market this year. A key source of information is the Australian Bureau of Statistics (ABS) Housing Finance data, which comes out monthly and includes a breakdown of first home buyers as a proportion of the market.

From September to November 2018, the proportion of first home buyer mortgages rose slightly, from 18.0% of owner-occupier lending to 18.3%.

The next data release will cover January 2019, meaning we won't get a clearer picture until April or May when the ABS releases data for January and February 2019.

And it's worth keeping in mind that many first-time buyers could be rentvesting: purchasing an affordable investment while continuing to rent their current home. These buyers are not classed as first home buyers in the data, but they are in a similar boat when it comes to affordability.

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