Amount of new Victorian first-home buyers hits highest number in nearly two years | ABS
Victorian first-home buyer numbers have recovered to their highest level since 2022.
Recently released Australian Bureau of Statistics data released shows the 3556 market entrants who committed to a mortgage in July brought the state to a 39,336 total for the preceding 12 months.
It’s the highest number recorded since they hit 39,688 in the year to December 2022, the same year the Reserve Bank began an extensive rate hiking cycle that sidelined thousands of first-home buyers.
RELATED: Hacks Gen Z can use to get $500k in 10 years
Vic hotspots where you can nab a home with $50k
Hidden gems: Where to snag a Melbourne pad under $350k
Their numbers had been broadly in decline after peaking at 53,718 in August 2021.
But the reduction accelerated after the first rate increase in May, 2022, and only began to recover after August last year — when they bottomed out at just 34,492.
PropTrack economist Anne Flaherty said first-home buyers said they would likely continue to drive sales and “will have a lot of power this spring” as the number of listings in their typical price ranges rise.
“One of the reasons we have seen such a strong rise is because of the number of investors selling off,” Ms Flaherty said.
Realestate.com.au economist Anne Flaherty
“They often compete for similar properties and the fact we are seeing so many hitting the market is creating opportunities.”
The economist said it was possible home prices would continue a gentle decline in many parts of Melbourne and Victoria over spring, and while that could spur more first-home buyer activity, she said it was unlikely their numbers would return to 2021 levels without a “big shift in government policies”.
At that time market entrants were being encouraged by record-low interest rates and incentives including the $25,000 HomeBuilder scheme.
Oxford Economics Australia senior economist Maree Kilroy said lacklustre home price movement in Victoria had been key to bringing market entrants off the sidelines, with flat or falling values effectively pricing some back into the market.
With wage growth and tax breaks, many were now in a better position than they were earlier in the year.
Meanwhile, landlord purchases in Victoria has declined to $2.45bn in July, low enough that Queensland’s $2.53bn in investment purchases trumped them for the first time since 2008.
Ray White Victoria chief executive Domenic Belfiore said his agency, the largest in the state, had seen an “influx of first-home buyers, especially in growth corridors”.
“And we are seeing good inspection numbers now, so there’s still more activity ahead,” Mr Belfiore said.
He noted that most of those committing to a purchase had been looking since the first half of the year, with those who had been home hunting for about six months now very confident when purchasing — and more recent market entrants showing greater signs of uncertainty.
Australian Property Home Loans director Adele Andrews said she’d seen a huge increase in first-home buyers entering the market this year.
Lorna Wang is a rentvestor who recently moved from Sydney to Melbourne and says she finds Melbourne’s market to be much more affordable. Picture: David Crosling
MORE: Tenant spends less rent on a Melbourne house than a Sydney apartment
Ms Andrews said prospective first-time purchasers had begun adjusting to the higher costs of living and the current interest rate environment in the past six months.
“People have got their heads around these changes (and) maybe even readjusted their expectations to what they thought they were going to get,” she said.
The broker added that there was a lot of pent up frustration from first-home buyers who had put their property purchasing on hold for the last 12 to 18 months, but were tired of waiting.
Many were also looking to escape the rental market, or living with their parents.
— Additional reporting with Sarah Petty
Sign up to the Herald Sun Weekly Real Estate Update. Click here to get the latest Victorian property market news delivered direct to your inbox.
MORE: ‘Lambo guy’ Adrian Portelli decides to forgo Stathmore mansion plan and sell land
Eddie Perfect lists Brunswick West home where he worked on Beetlejuice the Musical
Caulfield North: House where Foxtel, Dan Murphy’s shot TV commercials takes the spotlight