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.

Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
$2,408
Principal & Interest
Variable
$0
$530
70%
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5.99% p.a.
5.90% p.a.
$2,396
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Variable
$0
$0
80%
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6.14% p.a.
6.16% p.a.
$2,434
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Variable
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$250
60%
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Important Information and Comparison Rate Warning

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. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. 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 . 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





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