FHBs benefit in lending trends

New housing loans have hit their lowest level in four years, latest ABS figures show, in a trend that’s good news for first-time buyers. In September loans to investors fell 2.8%, while loans to owner-occupiers dropped 4.2%. Year-on-year (comparing September 2017 to September 2018), lending overall was down 7.7%.

RateCity research director Sally Tindall says “the group taking advantage of the situation is first home buyers”. FHBs increased their market share to 18% in September, up 0.2 percentage points from the month before. “The good news now is the door is wide open for first home buyers, provided they’ve got a decent deposit saved up,” Tindall says. “Banks are still in the business of writing loans. It just takes a bit more time and paperwork.”

Master Builders Australia’s chief economist Shane Garrett says another factor in favour of prospective first-home buyers is that rents have not risen strongly recently. “Rental prices are rising more slowly than at any time in a quarter of a century,” he says. “This is great news for renters.”