First home buyer participation surging
While home lending fell in the last month of 2017, first home buyer participation hit levels not seen in 8 years.
New figures from the Australian Bureau of Statistics found the number of home loans approved in December 2017 was down 2.3% on the month prior. Mortgage Choice chief executive John Flavell said the result was somewhat surprising, given the traditional strength of the property market in December.
"If we look at years gone by, we tend to see a small bounce in home loan demand in December. This is because many borrowers are keen to buy property and move into their new home over the summer period when they are likely to have time off work. But this time around, the story was a little different. Of course, when you consider the fact that some of the heat has come out of the property market, the 2.3% drop in home loan demand seems reasonable," Flavell said.
In spite of the decline, first home buyer participation surged, hitting its highest level since the December 2009 quarter.
"First home buyer participation in the housing market surged higher in 2017 to 18% of owner-occupier housing loans. A total of 104,000 housing loans were made to first home buyers during 2017 compared with 88,000 in 2016," Housing Industry Association principal economist Tim Reardon said.
First home buyer participation was strongest in Western Australia at 24.5%, followed by the Northern Territory at 24.1%. South Australia had the lowest first home buyer participation at 13.1%, followed by Tasmania at 13.6%.