Canberra first-home buyers, investors on the rise

Latest ABS data reports that first-home buyers continue to increase in Canberra, with investor activity also rising strongly.

The number of loans approved for first-home buyers increased over the month of March by 10.1 per cent to 174, compared to the 158 recorded over February.

The March number was the highest monthly total reported since November last year, and was 1.8 per cent higher than the 171 recorded over March last year.

A total of 451 first-home buyer loans have been approved over the March quarter, which is 6 per cent fewer than the 480 approved over the March quarter 2015.

The average first-home buyer loan in Canberra increased to $338,300 over March – the highest since the $355,000 recorded over December last year.

The value of residential investor lending in Canberra surged over March, increasing over the month by 20.0 per cent to $140 million – the highest monthly total for the year so far. Although lending activity by investors increased over the month, the value of lending to this group remains 22.4 per cent lower than that recorded over the March quarter last year.

The surge in investor lending may reflect the prospect of changes to negative gearing, with investors keen to secure property under existing taxation conditions. The rush to market by investors over March predates the cut in interest rates last week, which is likely to increase activity levels further.

First-home buyer activity in Canberra over March accounted for 13.9 per cent of all residential lending and remains below the long-term average of 16.8 per cent. Local first-home buyer loan market share, however, is ahead of all other states except Western Australia and Tasmania.

Despite the strong rise over March, Canberra investors accounted for just 33.0 per cent of all residential lending activity, which is the lowest market share of all the states and territories.