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New loan approvals are up almost 10 per cent since autumn 2023, signalling a revival of young buyer confidence.
Data from the Australian Bureau of Statistics (ABS) has revealed that new loan commitments have seen a 9.9 per cent increase since March 2023.
Surprisingly, given the extreme cost-of-living stress that many Australians are facing, young buyers may be experiencing a restoration of market optimism.
Dan O’Loughlin, managing director of Barry Plant Pakenham, Drouin and Berwick, stated: “Confidence is definitely back in the market, particularly among first-time home buyers who are feeling more secure about their finances.”
In his own outer Melbourne buyer base, he revealed “first-time home buyers are significantly outnumbering investors and owner-occupiers, remarkably taking up about 70 per cent of our buyer base looking for homes priced under $750,000”.
He has observed a strong preference among this demographic for new, detached homes with three or four bedrooms.
“Homes that are less than 10 years old are in high demand, while older homes, particularly those more than 20 years old, are less appealing to these buyers,” O’Loughlin observed.
Despite the not insignificant economic challenges that the Australian housing market is currently facing, O’Loughlin believes local market conditions will remain strong in the months to come.
“I would think people are looking to maximise the current market stability rather than wait for spring, which might bring another rate hike, or an increase in house prices,” he said.
“We had a fantastic May, and it has been pleasing to see such solid performance in the market, and I really don’t see it slowing through the winter months.”
The upsurge of first home buyers comes as new research has found that “the Great Australian Dream is alive and well” for young aspiring home owners, despite severe financial pressures.
With inner city prices increasingly unachievable for all but the wealthiest buyers, young Australians are turning to outer suburb locations and regional towns to secure their first home without breaking the bank.
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