14 April, 2023

First home buyers phased out

LENDING statistics have confirmed a slow down across owner occupiers, investors and Australians looking to buy their first home.

By Staff Writer

Real Estate Institute of Australia (REIA) president Hayden Groves said the figures showed a decline in loan commitments among new home buyers. 

“The value of new loan commitments for housing fell 0.9 per cent to $22.6 billion in February 2023 (seasonally adjusted) after a revised fall of 2.4 per cent in January, according to the Australian Bureau of Statistics (ABS),” he said.

“New owner-occupier loan commit-ments fell 1.2 per cent to $15 billion in February 2023, while the value of new investor loan commitments fell 0.5 per cent to $7.6 billion. 

“Housing finance has been in steady decline from the record highs in January 2022, with the total value of new loan commitments falling 33 per cent since then.” 

Mr Groves said first home buyers remain hesitant with the rate of first home ownership also slowing, down to 3.5 per cent in February 2023 after a revised fall of 4.6 per cent in January. 

“Fears around future rate hikes, cost of living pressures, affordability constraints and inflated construction costs are major contributing factors to the slow-down in first home buyer activity,” he said.

“With rents increasing and rental supply so challenged, obviously one way we can assist with this is encouraging Australians out of rentals and in to home ownership. The results coincide with the ‘NHFIC’s State of the Nation’s Housing 2022-2023’ report giving an analysis into housing demand and supply across Australia further highlighting the dire situation on the imbalance in the supply and demand of housing, and the consequences including inflated rents. 

“The gap between supply and household formation has widened since last year’s report,” Mr Groves said. 

“NHFIC now expects the cumulative gap between new household formation and new supply will be around -106,300 dwellings from 2023 to 2027.”


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