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FHBs slam the brakes as new loans slide despite budget promises
Fresh data has defied the federal government’s claim that its budget changes are letting more young buyers into the market, with first-time purchaser loans plummeting over the quarter.
Housing Minister Clare O’Neil has maintained that Labor’s contentious tax changes have helped more home buyers enter the market, despite fresh data showing new loan commitments have plunged across all purchasers.
O’Neil’s comments came as data from the Australian Bureau of Statistics (ABS) showed new first home buyer loan commitments fell 8.6 per cent over the September quarter, following a 2.2 per cent decline in the June quarter.
Despite sales volumes plummeting as the market softened, O’Neil insisted the overall share of non-investor lending had increased relative to first home buyers and owner-occupiers.
“What we’ve seen in the data so far is that we’re seeing first home buyers and owner-occupiers significantly increase the share of lending going to them,” she said on Seven’s Sunrise on Wednesday.
O’Neil added that more first home buyers were winning auctions they were competing in, which she said was one of the “good early indicators” of the shifting market.
“We are seeing investors step back from existing homes, but good robustness of investors investing in new dwellings.”
According to ABS data, the number of new investor loan commitments fell the most of all purchasers, by 30.6 per cent in the September quarter, marking the largest quarterly fall on record.
Meanwhile, the number of new owner-occupier loan commitments for dwellings fell 5.3 per cent in the same period.
O’Neil said the government had been “unapologetic” in its focus on getting more Australians into home ownership, and the data released since the budget so far highlighted its success.
“Those tax changes we made in the budget are all about giving first home buyers the opportunity they deserve,” she said.
“Over time, 75,000 Australian households will shift from being stuck in a rent trap and get into home ownership because of those changes.”
“There’s a lot of bad news about housing, I understand that we’ve got a 40-year-old housing crisis affecting our country, but we’ve got more homes under construction right now than we’ve ever had before in Australian history.
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“Our government’s producing more first home buyers than any other government in Australian history.”
Shadow Infrastructure Minister Bridget McKenzie slammed the government as “economically incompetent" as she criticised the repercussions of its housing policies.
“When Clare talks about first home buyers I’m thinking about those first home buyers who took her up on the offer of the 5 per cent deposit scheme, who are now in negative equity,” she said.
According to REA data released in August, 480 households using the 5 per cent scheme were in negative equity, making up 1 per cent of total participants in the scheme.
“I’m thinking about those with an average mortgage who now have to find an additional $30,000 a year to pay their mortgage repayments because of the interest rate rises on the back of economic incompetence,” McKenzie said.
Aside from the ABS’ figures, recent data showed that younger buyers have been retreating from the market, with Equifax revealing demand from 18–25-year-olds was 25 per cent below levels seen 12 months ago.
Meanwhile, mortgage demand from first home buyers fell significantly over the past 12 months, dropping by 22.1 per cent, the largest year-on-year drop since December 2022.
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