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Federal incentives are driving more first home buyers into the market
While property prices continue to grow, new research suggests that the government’s current crop of first home buyer incentives is having an impact on this segment of the market.
Federal incentives are driving more first home buyers into the market
While property prices continue to grow, new research suggests that the government’s current crop of first home buyer incentives is having an impact on this segment of the market.
The numbers don’t lie: Australia’s property market is a battleground between rising prices and first home buyer incentives.
Commenting on the release of new market research, NAB executive Andy Kerr said that momentum and confidence in the market has continued to drive strong results in recent months.
Despite the challenges presented by recent COVID-19 outbreaks and lockdowns, Mr Kerr said that NAB “recently saw our strongest month of home lending on record in June, which is a sign of very strong demand”.
Although Mr Kerr acknowledged some headwinds “in slower population growth and the impact of rising house prices”, he predicted that low rates and government programs like the First Home Loan Deposit Scheme will “continue to drive a strong housing market”.
Introduced back in 2017 and boosted in this year’s federal budget, the First Home Super Saver Scheme (FHSSS) allows eligible first home buyers to withdraw up to $50,000 in voluntary super contributions early for the purpose of raising a deposit for a property.
While the scheme hasn’t been without controversy, Mr Kerr noted that “confidence in the housing market continues to improve, and that shows in the amount of activity we are seeing through mortgage applications”.
Mr Kerr said that despite the current lockdowns impacting the lives of many Australians, “there is still appetite for conversations with customers to buy a home”, with more than a third of appointments in the last week conducted via video call.
NAB also found that half of surveyed first home buyers said they were more willing to buy new than they were two years ago. Northern Territory recorded the highest increase here, at 83 per cent, while NSW held the lowest spot on the table at 46 per cent.
Attributing this trend to the government’s current cadre of first home incentive schemes, NAB noted that the level of owner-occupiers has risen to 34.9 per cent, up from 30.1 per cent in the first quarter of 2021.
They found that buyers in this segment were most active in NSW, accounting for 38.5 per cent of home buyers. Queensland scored similarly high at 37.5 per cent. Western Australia and South Australia tied last at 30 per cent.
While incentives like the FHSSS are driving additional first home buyers into the market, NAB also found that rising house prices are continuing to have a significant impact on first home buyers.
NAB noted that this impact was highest in NSW and the ACT. Meanwhile, the impact of house prices for first home buyers was lowest in the NT, “where median house prices are also the lowest in the country”.
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