WA leads with highest share of first home buyers

Western Australia hasthe highest share of first home buyers and is the only state where this group records consistent above-average activity.

Activity by first home buyers in Perth remains solid despite the general decline in home buying this year.

Latest Australian Bureau of Statistics data reports that the number of loans approved for first home buyers in Western Australia increased marginally over July by 0.9 per cent to 1548 – 14 more than the 1534 recorded over the previous month.

Although monthly data for first home buyer finance has been remarkably consistent this year, the number of loans approved for this group over the first seven months of this year remains 13.8 per cent lower or 1673 below that recorded over the same period last year.

The value of loans approved to first home buyers over July accounted for 18.9 per cent of all residential lending in WA – above the long-term average of 18.6 per cent. WA has clearly the highest proportion of first home buyers of all the states and remains the only state consistently recording above-average activity from this group.

The average first home buyer loan approved over July in WA fell by 3 per cent over the month to $338,300 but was up marginally by 1.5 per cent over the average loan reported over July last year. 

The current average WA first home buyer loan is equivalent to a purchase price of about $425,000 with a 20 per cent deposit would require savings of around $85,000.

Regulator authorities have acted recently to curtail residential investor lending through increases in interest rates to this group. Perhaps it’s time to consider corresponding initiatives to cut interest rates for first home buyers to revive the great Australian dream of home ownership which for many aspirants in Perth still remains an uphill battle.

Dr Andrew Wilson is Domain Group Senior Economist Twitter@DocAndrewWilson The Property Show expert 2UE Saturdays 12.30-1pm