Buyers back on board

Bendigo Weekly | Bendigo Weekly | 13-Jul-2017

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NEW data shows first home buyers raced back into the home market in May.

Housing Industry Association principal economist, Tim Reardon, said the ABS released the housing finance data for May confirms new home lending increased during the month.

“We have seen significant growth in lending to first home buyers in many parts of the country during the month which has coincided with an increase in lending for new homes. This is likely to be due to the ongoing uptake of apartments that have come onto the market this year,” Mr Reardon said.

“Lending figures also show that the amount that first home buyers are borrowing has remained relatively flat over the past year. An increase in first home buyers in the market is always welcome and we hope that this improvement can be sustained. 

“There was also a growth in lending to new home buyers more broadly, particularly on the east coast. A 28 per cent increase in lending in Queensland for the month (14.6 per cent for the quarter), was the strongest result. 

“Of interest, and an issue to monitor in the future, is the reduction in lending for investment properties for the second month in a row. This could be as a result of the APRA restrictions announced at the end of March impacting on the confidence of investors. 

“During April and May 2017 the value of lending to investors dropped by 2.5 per cent and 1.4 per cent respectively. This could also be due to the expectation that home price growth is likely to slow further. “

The number of loans to owner occupiers constructing or purchasing new homes increased in a number of states over the year to May 2017. The strongest growth was in Queensland (+10.8 per cent), followed by Tasmania (8.1 per cent), Victoria (+6.0 per cent), South Australia (2.8 per cent), New South Wales (+2.5 per cent). 

The state’s property market continues to perform strongly with homes in regional Victoria taking a median of 55 days to sell in June – 11 days less than the same period last year. 

New REIV data shows homes in multiple regional towns sold significantly faster in June with the median days on market falling by double-digits over the year. A decline in the number of days a home takes to sell typically indicates increased buyer interest in a particular town or region. 

In the year to June 30, the private sale market in the tourist town of Hepburn Springs recorded one of the largest improvements with homes selling in a median of 38 days – 68 days faster than the same period last year.

Homes also sold faster in the coastal towns of Barwon Heads and Cowes in a median of 45 and 69 days respectively, both down by 51 days on June 2016 figures.

Kerang also experienced significant improvements over the year with homes spending 77 days on market in June, 37.5 days less than the same month last year. 

Increased buyer interest was also recorded in Wangaratta and Ocean Grove with homes selling 33 days faster than 2016 figures in a median of 36 and 49 days respectively. 

Other regional towns experiencing improvements in their private sale markets include Drouin, down 29 days over the year to a median of 32 days on market; Clifton Springs, falling 26.5 days over the year to a median of 39 days on market; Bannockburn, down 26 days over the year to a median of 49 days; and Warragul, falling 25.5 days over the year to a median of 29 days on market. 

Meanwhile, the Geelong suburb of Waurn Ponds was one of the state’s best performing private sale markets in June with homes spending just 22 days on market – 20 days less than the same period last year. 

This was followed by Corio and Irymple where homes spent just 27 days on the market in June, down 15 and five days respectively on June 2016 figures. 

Strong private sale markets were also evident in Lara, Belmont and East Geelong with homes in these areas selling in a median of 29 days.

For more information on median days on market by town, visit reiv.com.au.

Joseph Walton

President, Reiv

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