First home buyers surge back into the market: Hotspots revealed

author-avatar By
on December 15, 2020
First home buyers surge back into the market: Hotspots revealed

A combination of record low interest rates, a brief dip in house prices and a range of government incentives have driven a surge in mortgage lending to first home buyers.

In the three months to October 31, lending to first home buyers at NAB spiked by 21% against the 12-month average, representing the only growth in the market over this period.

"First home buyers are back in the market at levels we haven't seen for a decade," NAB Executive, Home Ownership, Andy Kerr said.

"Demand has been supported by historically low interest rates and more government support, such as the First Home Loan Deposit Scheme and HomeBuilder.

"A brief pullback in property prices also helped FHBs as the uncertainty of COVID-19 put many plans on ice, with investor demand slowing noticeably."

It comes after CoreLogic released its Quarterly Economic Review yesterday which revealed a 35.1% surge in first home buyers in the year to October.

CoreLogic Head of Research Eliza Owen said: "There are several factors that contributed to this growth in first home buyer activity, including generational trends, monetary and fiscal incentives and lower dwelling values and competition."

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner occupiers.

Lender

Variable
More details
UNLIMITED REDRAWS
  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
UNLIMITED REDRAWS

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
Variable
More details
REFINANCE ONLY
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
REFINANCE ONLY

Variable Rate Home Loan – Refinance Only

  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
Variable
More details
AN EASY DIGITAL APPLICATION
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
AN EASY DIGITAL APPLICATION

Neat Variable Home Loan (Principal and Interest) (LVR < 60%)

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
Variable
More details
NO ONGOING FEES
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
NO ONGOING FEES

Yard PAYG Home Loan (Principal and Interest) LVR ≤ 80%

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of August 7, 2022. View disclaimer.

The research from NAB, which was the first bank chosen to support the Federal Government's First Home Loan Deposit Scheme, found that regional areas and outer suburbs are the most in demand among first home buyers, backing up reports of an exodus from the capital cities.

Nationally, regional areas recorded a 44% surge in first home buyer activity, with regional New South Wales the standout with a 57% spike. 

The demand for property in regional areas has also started to drive property prices up. The November CoreLogic Home Value Index showed a 5.7% increase in growth in house prices in regional areas compared with capital city growth of 1.1% in the year to date.

Mr Kerr said the trend towards buying in regional areas for lifestyle reasons as a result of the pandemic is likely to continue for some time.

"Flexible working arrangements implemented due to COVID-19 are encouraging many Australians to consider a tree or sea change as easy access to the CBD moves down the priority list.

"Many are seeing the potential of more land and a more relaxed lifestyle with easy access to areas like the Blue Mountains in NSW and Great Ocean Road in Victoria proving very popular."

The growth in first home buyer lending has been nationwide, with Queensland coming out on top. First home buyer activity in the Sunshine State was up 39% over the past three months, closely followed by Western Australia (37%), NSW/ACT (31%), and SA/NT (23%). 

Victoria and Tasmania saw much lower levels of first home buyer activity, with just 3% growth. However, the trend towards regional areas remains clear with 30% growth.

Location FHB Lending - Growth past 3 months
National 21% (Metro: 17%; Regional 44%)
NSW/ACT 31% (Metro: 27%; Regional 57%)
VIC/TAS 3% (Metro: -4%; Regional 30%)
QLD 39% (Metro: 35%; Regional 44%)
WA 37% (Metro: 30%; Regional 55%)
SA/NT 23% (Metro: 16%; Regional 36%)

Mr Kerr expects first home buyers to remain very active in the market in 2021 with low interest rates expected for at least the next three years and government incentives to enter the property market.

"We've seen first-hand the value of the First Home Loan Deposit Scheme and the continued strong demand for it.

"We expect this demand to continue well into 2021, especially given the current conditions make buying cheaper than renting for many prospective first-time homeowners."

First home buyer hotspots

New South Wales

Greater Sydney

  • 2127 – including Newington +70%
  • 2150 – including Parramatta +66%
  • 2174 – including Abbotsbury +157%
  • 2560 – including Campbelltown North +48%
  • 2570 – including Camden & Oran Park +38%
  • 2747 – including Llandilo & Cambridge Park +54%
  • 2750 – including Penrith +68%

Outside Sydney

  • 2259 – including Wyong (Central Coast) +111%
  • 2287 – including Wallsend (Newcastle) +65%
  • 2444 – including Port Macquarie +143%
  • 2478 – including Ballina +148%

Victoria

West of Melbourne CBD

  • 3217 – including Armstrong Creek +97%
  • 3216 – including Waurn Ponds & Belmont +56%
  • 3338 – including Melton South +38%
  • 3029 – including Tarneit & Hoppers Crossing +22% (postcode with most lending to FHB in the state)

East of Melbourne CBD

  • 3196 – including Chelsea and Edithvale +60%
  • 3175 – including Dandenong +50%
  • 3174 – including Noble Park +32%
  • 3978 – including Clyde +32%
  • 3810 – including Pakenham +27%
  • 3977 – including Cranbourne +23%

Queensland

South-east

  • 4118 – including Browns Plains (Logan City) +106%
  • 4209 – including Coomera (Gold Coast) +94%
  • 4300 – Greater Springfield (Ipswich) +67% (most lending)
  • 4305 – Central Ipswich +93%
  • 4306 – including Karrabin (Ipswich) +58%
  • 4509 – including North Lakes (Brisbane) +99%

North and west

  • 4817 – including Hervey Range and Bohle Plains (Townsville) +64%
  • 4825 – including Mount Isa +115%

Western Australia

Perth

  • 6061 – including Nollamara & Mirrabooka +107%
  • 6062 – including Morley +78%
  • 6107 – including Cannington +63%
  • 6110 – including Huntingdale +91%
  • 6112 – including Armadale +63% (most lending)

Regional

  • 6430 – Kalgoorlie +62%
  • 6530 – Geraldton +117%

South Australia

Adelaide

  • 5085 – including Clearview and Enfield +52%
  • 5086 – including Oakden and Hillcrest +51% (most lending)
  • 5108 – including Salisbury +68%

Photo by Erda Estremera on Unsplash



Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

Latest Articles

author-avatar
Emma Duffy is Assistant Editor at Your Mortgage and  Your Investment Property Mag, which are part of the Savings Media Group. In this role, she manages a team of journalists and expert contributors committed to keeping readers informed about the latest home loan and finance news and trends, as well as providing in-depth property guides. She is also a finance journalist at Savings.com.au which she joined shortly after its launch in early 2019. Emma has a Bachelor in Journalism and has been published in several other publications and been featured on radio.

Collections:

Be Savings smart.
Subscribe for free money newsletters.

By subscribing you agree
to the Savings Privacy Policy