2022 election promises could trigger boost in first home buyer activity

After nine months of consecutive falls the number of first home buyer loans increased 1.9 per cent in November

2022 election promises could trigger boost in first home buyer activity
2022 election promises could trigger boost in first home buyer activity

First home buyer numbers will likely drop in 2022 as many young Australians find themselves priced out of the hottest property market in decades, according to RateCity.com.au research director, Sally Tindall.

The forecast came after November saw the number of first home buyers rise.

After nine months of consecutive falls the number of first home buyer loans increased 1.9 per cent in November according to the ABS lending data.

But is still 28.5 per cent lower than the peak in January 2021.

The number of owner occupier first home buyer loan commitments sat at 11,622 buyers in November, down 17% on a year ago or down 2,442.

Owner occupier first home buyer loan commitments accounted for 29% of all owner occupier commitments (excluding refinancing).

“The number of first home buyers rose (in November) as NSW and Victoria came out of lockdown, but with average loan sizes ballooning, this is more likely to be a blip than a trend,” Tindall said.

“We expect first home buyer numbers will drop in 2022 as many young Australians find themselves priced out of the hottest property market in decades.

“Growth in property prices is starting to slow on the back of fixed rate rises and a crackdown by the regulator, but the opening up of borders this year will increase demand, keeping prices moving north.

“One X factor for first home buyers is the upcoming federal election. The government knows it has a housing affordability issue that needs to be addressed.

“To date, the government has only tackled this issue with piecemeal schemes. These band-aid measures might help some people into the market, but they do nothing to properly address housing affordability at its core,” she said.

The value of new loan commitments to owner occupied first home buyers rose to reach $5.38 billion in November.

Canstar Group Executive, Financial Services, Steve Mickenbecker noted first home buyers were borrowing $56,000 or 13.7 percent more over the year.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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