First-home buyer loans in Canberra jump 34 per cent

Canberra has had the greatest jump in the country in the number of first-home buyer loans, according to the latest release of the Adelaide Bank/REIA Housing Affordability Report.

In the three months to December 2018, first-home buyer loans in the nation’s capital jumped 34 per cent quarter-on-quarter – from 530 loans in the September 2018 quarter to 710. 

First-home buyer loans represented 25.1 per cent of the ACT’s owner-occupier market over the quarter.

“It’s interesting to see how the number of first-home buyer loans in the ACT has picked up in the fourth quarter,” said Bendigo and Adelaide Bank head of economic and market research David Robertson.

“Some of that would indicate it was slower over the winter quarter when the numbers were down.”

The average first-home buyer loan in Canberra increased over the quarter by 2 per cent to $321,469.

This comes as stamp duty is set to be abolished for all first-home buyers in the ACT with an annual household income of less than $160,000 from July 1 this year.

Mr Robertson said first-home buyers weren’t holding back, as they were taking advantage of slowing price growth and price falls.

“First-home buyers have a lot more buying opportunity,” he said.

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The ACT also had the largest increase in the total number of loans over the quarter, up 24.1 per cent. This is in stark contrast to the September 2018 quarter when Canberra recorded the highest fall in the number of home loans. 

Mr Robertson said strong population growth and low unemployment rates were contributing to this increase.

“There’s a healthy combination of people moving to the ACT, and that’s a result of jobs growth. It’s having an impact on the demand for housing and that trend has some momentum,” he said.

Over the quarter, the average loan size increased by 3.1 per cent to $403,847.

Both housing and rental affordability have declined in Canberra, the report found.

The proportion of income needed to meet loan repayments increased by 0.9 percentage points over the quarter to 20.6 per cent, while the proportion of income to meet the median rent increased by 0.5 per cent to 18.9 per cent.

“Housing affordability declined slightly but the ACT has some of the best ratios in terms of affordability compared to the rest of Australia,” said Mr Robertson.