Andrew Wilson: Canberra buyers' underlying confidence re-emerges

Investors and first-home buyers continue to engage the Canberra housing market in solid numbers, reflecting the re-emergence of underlying confidence over the past year.

The latest data from the ABS reports that 171 loans were approved for first-home buyers over April which was just below the 174 approved over the previous month.

The March total was the highest for the year so far with the close April follow-up encouraging given the significant holiday distractions that sidelined the local housing market over the month.

Although Canberra reported a reasonable result over the month, first-home buyer’s numbers are down by 52 or 7.7 per cent this year so far compared with the same period last year.

The average first-home buyer loan approved in Canberra fell to $326,400 over April – down by 3.5 per cent from the $338,300 recorded over the previous month. Despite the fall, the average first-home buyer loan in Canberra has increased by 4.4 per cent compared with that recorded over April last year.

First-home buyer loan activity now accounts for 13.4 per cent of all residential lending in Canberra and below the long-term average of 16.8 per cent. The Canberra first-home buyer market share trails only Western Australia and Tasmania at 18.5 per cent and 20.5 per cent respectively.

Residential investor lending in Canberra increased over April according to the ABS, rising by 5.9 per cent to $148.28m and was the only state or territory to record an increase over the month. Lending to investors however remains 23.1 per cent below that recorded over the same period last year.

Lower mortgage rates that were activated in May following the Reserve Bank cut will only enhance the likelihood of a strong follow-up increase in lending to both first-home buyers and investors in Canberra.