Queensland first home buyers keep rising

First home buyer activity continues to increase in Queensland according to the latest data from the ABS.

In December, 1752 loans were approved for first home buyers, an increase of 4.8 per cent over the month. Decembers result was the highest monthly total recorded since October 2014 with the trend in loan approvals to this group clearly on the rise.

The number of first home buyer loans increased by 1.7 per cent over 2015 compared to the previous year – rising to 18,882. December’s total was also 4.5 per cent higher than the number approved over December 2014.

The average first home buyer loan approved over December fell marginally over the month to $299,100 but remained 2.3 per cent higher than the average loan recorded over December 2014.

First home buyer activity now accounts for 11.9 per cent of all residential lending, the highest loan market share recorded by the state since September 2014 and rising towards the long-term average of 15.5 per cent.

Low interest rates and modest house price growth continues to encourage first home buyers into the market place with confidence clearly rising in this important market segment.

The Reserve Bank meets for the second time this year next week to determine the direction of official interest rates over March. Although rates are likely to stay on hold for the 10th consecutive month, the bank will be alert to the weaker recent jobless numbers which if continue to deteriorate will see rates fall sooner rather than later.

Dr Andrew Wilson is Domain Group Chief Economist Twitter at @DocAndrewWilson