The most popular suburbs for first homebuyers have been revealed, with the interest rates consistently staying low, combined with a dip in house prices and a range of government incentives, it is clear why there has been a sudden rise in mortgage lending to first homebuyers according to National Australia Bank (NAB) data.
The new data from NAB reveals that regional areas and outer suburbs are most in demand among first homebuyers. As the switch to working from home has been successful amongst businesses, some first homebuyers are less concerned about commute times when choosing a home location.
Lending to first homebuyers at NAB has increased by 21% in the three months to October 31, compared to the 12-month average.
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“First home buyers are back in the market at levels we haven’t seen for a decade,” NAB Executive, Home Ownership, Andy Kerr said.
“Demand has been supported by historically low-interest rates and more government support, such as the First Home Loan Deposit Scheme and HomeBuilder. A brief pullback in property prices also helped FHBs as the uncertainty of COVID-19 put many plans on ice, with investor demand slowing noticeably.
“As a result, many of our customers are telling us they are getting their dream home earlier than they thought possible, which is great news.”
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This comes after CoreLogic had released their Quarterly Economic Review which unpacks the recent recovery in the housing market.
Nationally, housing market values did not see the large decline anticipated at the start of the COVID-19 pandemic. Housing values fell just 1.9% between March and September before moving into a recovery trend, increasing 0.4% nationally through October and 0.8% in November.
It also revealed a 35.1% surge in first home buyers in the year to October.
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CoreLogic Head of Research Eliza Owen said: “There are several factors that contributed to this growth in first home buyer activity, including generational trends, monetary and fiscal incentives and lower dwelling values and competition.”
Data from the Australian Bureau of Statistics (ABS) revealed that first home buyers accounted for 32.4% of the record high loan approvals in August 2020.
Reserve Bank Governor Philip Lowe says it’s a good time for first homebuyers to buy the property they’ve wanted as the interest rates will stay low for a while and government incentives are promising.
However, as a result, and impact of the COVID-19 pandemic, he warns the jobless rate will remain high for a while, as house prices increased in every capital city in November despite a 10% unemployment rate and the RBA’s previous expectations that there would be very large declines in housing prices.
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Regional areas recorded a 44% surge in first homebuyer activity, with regional New South Wales recording an increase of 57%, in months leading to October.
Mr Kerr said the trend towards leaning towards regional areas for lifestyle reasons were as a result of the pandemic and will likely continue.
“Flexible working arrangements implemented due to COVID-19 are encouraging many Australians to consider a tree or sea change as easy access to the CBD moves down the priority list.”
“Many are seeing the potential of more land and a more relaxed lifestyle with easy access to areas like the Blue Mountains in NSW and Great Ocean Road in Victoria proving very popular.”
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He also believes that this low-rate environment will likely remain till next year and will ensure a continued growth in the participation of first homebuyers in the housing market.
“We expect this demand to continue well into 2021, especially given the current conditions make buying cheaper than renting for many prospective first-time homeowners,” Mr Kerr said.
Geographical data by NAB show where first-home buyers are gravitating towards when it comes to buying a home.
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First Homebuyers Hotspots
New South Wales
- 2127 – including Newington +70%
- 2150 – including Parramatta +66%
- 2174 – including Abbotsbury +157%
- 2560 – including Campbelltown North +48%
- 2570 – including Camden & Oran Park +38%
- 2747 – including Llandilo & Cambridge Park +54%
- 2750 – including Penrith +68%
- 2259 – including Wyong (Central Coast) +111%
- 2287 – including Wallsend (Newcastle) +65%
- 2444 – including Port Macquarie +143%
- 2478 – including Ballina +148%
West of Melbourne CBD
- 3217 – including Armstrong Creek +97%
- 3216 – including Waurn Ponds & Belmont +56%
- 3338 – including Melton South +38%
- 3029 – including Tarneit & Hoppers Crossing +22% (postcode with most lending to FHB in the state)
East of Melbourne CBD
- 3196 – including Chelsea and Edithvale +60%
- 3175 – including Dandenong +50%
- 3174 – including Noble Park +32%
- 3978 – including Clyde +32%
- 3810 – including Pakenham +27%
- 3977 – including Cranbourne +23%
- 4118 – including Browns Plains (Logan City) +106%
- 4209 – including Coomera (Gold Coast) +94%
- 4300 – Greater Springfield (Ipswich) +67% (most lending)
- 4305 – Central Ipswich +93%
- 4306 – including Karrabin (Ipswich) +58%
- 4509 – including North Lakes (Brisbane) +99%
North and west
- 4817 – including Hervey Range and Bohle Plains (Townsville) +64%
- 4825 – including Mount Isa +115%
- 6061 – including Nollamara & Mirrabooka +107%
- 6062 – including Morley +78%
- 6107 – including Cannington +63%
- 6110 – including Huntingdale +91%
- 6112 – including Armadale +63% (most lending)
- 6430 – Kalgoorlie +62%
- 6530 – Geraldton +117%
- 5085 – including Clearview and Enfield +52%
- 5086 – including Oakden and Hillcrest +51% (most lending)
- 5108 – including Salisbury +68%
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This information is a guide only and is an estimate only based on the past 12 months of aggregated online mortgage enquiries from eChoice and partner programs.
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Words by Ece Demir
- CoreLogic Quarterly Economic Review: November quarter data reveals contributors to post-pandemic property recovery
- ‘Dream home’: Major bank reveals first homebuyer hotspots
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- ‘Good time for first-home buyers’ RBA boss says, but jobless rate to stay high
- NAB Reveals First Home Buyer Hotspots as Demand Surges
- Revealed: First-home buyer hotspots
- The most popular suburbs for first-home buyers revealed: NAB data
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