The number of first home buyers taking out a loan has increased over the past three months, with more looking to take advantage of the current housing climate, according to new research.
The ABS has released the Lending to Households and Businesses report data for July 2019, pinpointing a surge in first home buyer loans.
According to the data, the number of loans to first home buyers was up by 1.3 per cent for the month of July and 4.0 per cent for the three months to July.
“First home buyers are continuing to take advantage of a less competitive environment and more affordable house prices,” said HIA economist Angela Lillicrap, commenting on the results.
“First home buyers account for just under one-third of the total market; the continued growth of this segment is important for the broader housing market.
“Market confidence is slowly returning, with lending to households building and purchasing new homes remaining flat in the three months to July 2019 declining by only 0.8 [of a percentage point] compared to the previous three months.
“Lending for established dwellings increased by a modest 0.5 [of a percentage point] during the three months to July.”
Given the lag between loan applications and final approval, it is unlikely that the full effects of the tax cuts and the two RBA rate cuts will be seen in the recently released figures, according to Ms Lillicrap, who noted “these changes should lead to more positive data as the year progresses”.