First Home Buyers pause on property dream

“Despite April’s fall in new commitments for owner-occupier first home buyers, the series remains up 20.2 per cent on the most recent low point in December 2018,” the ABS noted.

Commenting on the findings was REIA president Adrian Kelly, who explained that despite the first home loan commitments falling, the proportion of first home buyers, as part of the total owner-occupied housing financial commitments, is now 36.7 per cent.

“Not surprisingly, ABS reports that lending institutions have indicated that COVID-19 impacts were being seen through both reduced demand from borrowers and tighter lending criteria,” Mr Kelly said. 

“What is more sobering is that ABS says COVID-19 operational impacts experienced by some lending institutions resulted in a backlog of March housing loan applications being processed in April, which moderated the April fall in loan commitments.”

The value of new loan commitments for both owner-occupiers and investors displayed the largest fall in 12 months and the purchase of existing dwellings experienced the largest fall in over a decade.

“Feedback from agents suggests that worse is yet to come on housing finance figures as restrictions on movements throughout May and caution about the economy impact on activity in the housing market,” Mr Kelly continued.

However, in positive news for the property market, the number of new dwellings approved rose by 1.0 per cent in April in trend terms, the ABS noted. 

“The rise in April was driven by both private sector dwellings excluding houses (1.0 per cent) and private sector houses (0.8 per cent),” said Daniel Rossi, director of construction statistics at the ABS.

“These results are consistent with leading indicators in early 2020, prior to the onset of the COVID-19 pandemic restrictions. Building approvals typically lag early indicators of housing demand, such as new home sales and new loan commitments.”

Across the states and territories, dwelling approvals rose in the ACT (13.2 per cent), Northern Territory (10.0 per cent), Tasmania (4.2 per cent), Western Australia (2.3 per cent) and NSW (2.0 per cent) in trend terms. Falls were recorded in Victoria (0.7 per cent) and South Australia (0.6 per cent), while Queensland was flat.