Western Australia first home buyer and investor numbers fall

Western Australia first home buyer numbers have fallen marginally but underlying levels remain solid compared to other housing market activity.

Latest ABS data shows that 1540 first home buyer loans were approved in August, which was a reduction of just 1.4 per cent over the 1562 approved in July.  The August total was the lowest since May and also just below the 1561 approved in August last year.

A total of 12,033 loans have been approved during the first eight months of this year in WA compared to 13,714 during the same period last year.  This is a fall of 1681, or 8.8 per cent.

Photo: Supplied

The average WA first home buyer loan fell by 1.5 per cent in August to $333,400 but was 1.8 per cent higher than the $327,600 reported during August last year.

Lending to first home buyers in WA accounted for 19.7 per cent of all residential lending, excluding refinancing, in August. This was an increase on the 19.0 per cent market share recorded in July and continues to track above the long-term average 18.6 per cent. WA clearly enjoys the highest proportion of first home buyer home loan market share of all the states, with the next best Tasmania at 13.0 per cent.

WA also recorded a sharp fall in investor lending in August with the value of loans approved to this group down from $1.13 billion to $1.05 billion, a decrease of 7.2 per cent. The value of investor lending in WA during the first eight months of this year is now 4.7 per cent lower than that recorded during the same period in 2014.

Photo: Supplied

Investor activity in August accounted for 40.3 per cent of all residential lending during the month, which is the lowest market share recorded since April.

All states again recorded sharp decreases in investor lending during the month, after similar declines the previous month. Action by banks to increase interest rates to investors at the direction of the regulatory authorities is clearly having an impact on investor activity nationally.

The ABS reported that the value of finance approved in WA for owner-occupier dwellings, excluding refinancing, was also down throughout August, falling by 5.1 per cent to $1.56 billion.

The value of finance approved for total dwellings, excluding refinancing, in WA fell by 6.0 per cent during the month to $2.6 billion, the lowest result recorded since February. Home lending during the first eight months of this year remains 8.3 per cent below the value financed during the same period last year – a reflection of the subdued conditions of the Perth housing market.
Dr Andrew Wilson is Domain Group Senior Economist Twitter@DocAndrewWilson