First home buyers on the increase

FIRST home buyer loan approvals have increased strongly over the last two years with 115,000 approved in the last financial year alone – the largest number since 2009-10.

This has seen first home buyers share of new residential lending rise from 13.7 per cent in October 2016 to 18.1 per cent in October 2018 to be at its highest level in six years.

Federal Treasurer Josh Frydenberg said that during the Rudd-Gillard years new lending to first home buyers fell from 19.1 per cent at the end of the Howard Government to 16.3 per cent as the youth unemployment rate surged by nearly 3 percentage points.

He said that the recent improvement in first home buyer activity was driven by a number of factors including the Federal Government’s plan for a stronger economy and the creation of over 1.2 million jobs.

“Employment is the foundation for buying a first home and with more than 100,000 young Australians getting a job last financial year, the highest number on record, the future looks bright,” Mr Frydenberg said.

“Over the last year Coalition Government initiatives have also played an important role in supporting people realise their dream of owning a home.

“The Government has successfully implemented a number of measures announced in the Reducing Pressure on Housing Affordability 2017-18 budget package.

“This includes initiatives such as the Government’s irst Home Super Saver Scheme and incentives for older Australians to downsize and put proceeds of sale into their super.

“The major credit rating agencies have warned of the negative consequences to the broader economy from a sharp fall in house prices which could stem from a larger pullback in investor demand putting at risk our AAA credit rating.”