According to the Australian Bureau of Statistics (ABS) latest report, the value of new owner-occupier housing loan commitments rose 2.1 per cent in May 2022, while investor loan commitments rose just 0.9 per cent.
Real Estate Institute of Australia (REIA) president, Hayden Groves, said the value of new owner-occupier housing loan commitments contributed to 82 per cent of the rise in total lending.
“The number of new loan commitments to first home buyers grew by 2.3 per cent in May 2022 but was 31.6 per cent lower compared to the same time last year when first home buyer stimulus packages remained in place,” Mr Groves said.
“These figures show first home buyers keen to lock in mortgages as interest rate hikes loom.”
A new release of first home buyer stimulus packages was announced last week, with 35,000 more Australians soon to be qualifying for a loan through the Home Guarantee Scheme (HGS).
REIA has welcomed the release and said the expansion of the HGS was a “priority outcome” in their Getting Real Policy Report.
Mr Groves advised first home buyers to talk to their broker and secure a property.
“For agents, we urge them to ensure potential first home buyers and tenants looking into home ownership are aware of the scheme in particular,” he said.
However, while the REIA are optimistic with the new opportunities, Mr Groves said rising interest rates and inflation would impact first home buyers.
“We have already seen home buyer activity ease off due to renewed investor interest in the market and rising interest rates, but it is great to see this support come online as post pandemic economic conditions set in,” he said.
“The number of loans to first home buyers was down a whopping 32.8 per cent on what was recorded a year ago, however, new loan commitments to this market increased 4.2 per cent in March after two months of decreases.
“Hopefully, these conditions allow the marketplace to stabilise and offer new opportunities for first time buyers to secure their own slice of the great Australian dream.”
Although the value of loans has increased, Mr Groves said consumer sentiment is a concern as inflation and further interest rates rises continue, as recorded by CoreLogic.
“CoreLogic reflects home sales nationally through the June quarter were minus-15.9 per cent lower than a year ago but are still holding 12 per cent above the previous five-year average,” he said.
“National advertised stock levels remain minus-7.4 per cent lower relative to 2021, in Sydney and Melbourne, where housing conditions are the weakest, total advertised supply is now 7-8 per cent above the levels recorded a year ago and well above the five-year average.
“It is not all bad news on the supply front, where Hobart has seen advertised stock levels jump 48.4 per cent higher relative to last year and inventory is 20.7 per cent higher in Canberra.”
Mr Groves blamed the rise in advertised supply across some markets on a slowdown in absorption rates.
“Estimated transactions in Sydney throughout the June quarter were minus-36.7 per cent lower than a year ago while Melbourne is down minus-18.3 per cent,” he said.
“This trend is reflected in today’s ABS lending figures, and we expect this to be borne out in future months.”
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