More first-home buyers, investors and overseas buyers keen on new property: NAB

The appeal of new residential property is growing among first-home buyers, investors and overseas buyers, according to NAB’s latest quarterly residential review. 

While owner occupiers remain the biggest category of new home buyers, their share of the market fell sharply in the final quarter of 2011 from 52% to 38%. 

A combination of lower rate and softer prices resulted in first-home buyers accounting for nearly a quarter (24%) of new home buyers in the December quarter, up from 17% in the September quarter. 

Investor numbers increased from 4% to 8% spurred on by lower rates and softer prices as well as stronger rental returns. 

Overseas buying activity doubled from 4% to 8% with NAB noted was consistent with some recent reports of strong foreign buying activity in the apartment market.

NAB expects these trends to stay broadly unchanged over the next 12 months.

According to the survey of 270 real estate industry particpants, demand for new residential property is expected to strengthen across all property types over the next 12 months, led by inner-city low-rise apartments and townhouses, where demand conditions are expected to be good. 

Demand for inner-city houses is also expected to strengthen, especially in NSW, with demand conditions approaching good. Demand is expected to remain weakest for high-rise apartments in the middle/outer ring, although somewhat stronger than in September, with demand for this type of property weakest in SA/NT, Victoria and WA.

Currently, the most popular new property types are inner-city low-rise apartments and townhouses, followed by inner-city detached housing, with demand strongest in NSW and Victoria.

There was a slight improvement in demand for new residential houses and low-rise apartments and townhouses in the middle and outer ring of major cities during the December quarter. 

In contrast, demand for all other types of new residential property weakened relative to the September survey.