Home loans and first-home buyers on the rise

Latest ABS housing finance data confirms the revival in home-buyer activity in Canberra this year.  The number of owner-occupied home loans approved in the ACT excluding refinancing increased by 10.5 per cent over July to 864. This was the second highest monthly total in the series recorded for the year and just behind the 871 reported over May.

The number of loans reported for home purchases has increased by 154 or 2.9 per cent for the first seven months of this year compared to the same period last year. The average owner-occupied home loan excluding refinancing over July was $255,337 also an increase of 2.9 per cent over the month.

First-home buyers are contributing to the recent revival in the Canberra housing market activity. According to the ABS, the number of home loans approved for first-home buyers increased 2 per cent over July to 102. This was the highest monthly total reported for that group since September last year when changes to the local government treatment of the first-home owners grant came into effect.

The average loan for a first-home buyer over July in Canberra was $298,000 down slightly on the $298,700 recorded the month before over June.

Although first-home buyer numbers have clearly increased and the underlying trend remains positive, the proportion of this buyer type remans at low levels. Just 8.4 per cent of all housing finance excluding refinancing approved in July was directed to first-home buyers, half the long-term ACT average of 16.8 per cent.

Dr Andrew Wilson is Domain Group Senior Economist Twitter@DocAndrewWilson

The Property Expert 2UE Saturdays 12.30-1pm