The Housing Industry Association (HIA) is heralding the return of first home buyers to the market.
The HIA cited data recently released by the Australian Bureau of Statistics (ABS).
“The growth of first home buyers is evident across all markets but is most dramatic in NSW and Victoria (57.7 % increase and 32.2% increase from the previous quarter) where an increase in the FHOGs [First Home Owner Grants] have boosted sales,” said HIA’s Principal Economist Tim Reardon.
Reardon added that first home buyers have also been incentivized by the large supply of apartments that are currently being completed.
“This is a very positive sign of a healthy market. First home owners have been forced out of the market in recent years due to rising prices,” he said.
At the same time, tighter regulations have been pushing out investors.
“On the other side of the market, investors have incurred additional borrowing costs from APRA regulatory imposts which have limited the availability of loans to investors and therefore forced up the effective interest rate they incur. This was the intention of these imposts,” Reardon commented.
While the HIA welcomes the return of first homebuyers, it noted the important role of investors in generating the supply of new homes.
Investor borrowing has decreased 2% under the new restrictions.
“The cooling of investor activity in the market should be closely monitored,” concluded Reardon.
In other news, the HIA recently appointed Stephen Knight as a new leader for operations in SA.