The 'single biggest factor' driving the rise in first homebuyer activity for Australians
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The ‘single biggest factor’ driving the rise in first homebuyer activity for Australians

The number of loans issued to first home buyers has risen by 20 percent over the past 12 months

By Bronwyn Allen
Tue, Jan 16, 2024 10:08amGrey Clock 3 min

The number of new loans being issued to the most budget-conscious cohort of buyers in the property market – first-time purchasers – has increased by 20 percent over the past 12 months, according to new data from the Australian Bureau of Statistics (ABS). Almost 10,400 new loans were written for first home buyers in November, 31 percent of them in Victoria, 23 percent in New South Wales and 19 percent in Queensland.

Despite the common affordability challenges faced by younger Australians, lending to first homebuyers is currently tracking at 29.4 percent of all new owner-occupier finance, which is above the 10-year average of 24.3percent. The value of all owner-occupier loans rose by 0.5 percent in November to $17.86 billion, up 10.6 percent over the past 12 months. The value of investor loans rose by 1.9 percent to $9.72 billion, which is 18 percent higher than a year ago. But the boost to first homebuyer finance is much bigger, up 2.8 percent in November to $5.25 billion, but more significantly, it’s up 25.8 percent compared to a year ago.

The ABS points out that a large component of November’s increase in first home buyer finance was due to a surge in Queensland. This coincides with a doubling of the state’s First Home Owner Grant to $30,000 for eligible first home buyers purchasing or building a new home. The grant is the equal highest state grant available to young buyers and triple the size of grants available in New South Wales and Victoria.

There are two key factors underpinning rising first home buyer activity, despite today’s high interest rates. The first and most significant is the growing impact of the Bank of Mum and Dad, with parents typically getting involved at the start of the process. They are either gifting cash to help fund the deposit, offering rent-free accommodation to their children throughout their 20s so they can save a deposit themselves, or going guarantor on their loans.

Research published last year by the Australian Housing and Urban Research Institute (AHURI) found parental help has “become one of the key enablers of the transition into home ownership”. According to AHURI’s findings: “Parental transfers, both direct and in-kind, are increasingly assisting individuals make a more rapid transition into home ownership. Analysis identified that in-kind transfers in the form of co-residence with parents (and not renting) lifts the likelihood of transitioning into home ownership by 40 percent.”

AHURI says first homebuyers’ ability to save a deposit using their earnings alone had diminished over time as property values – and thus the required deposit amounts have risen. According to PEXA data, buyers in NSW needed a median deposit of just below $120,000 to buy a home in FY23, up 3.9 percent on FY22. In Victoria, the median deposit was $84,723, down 0.5 percent, and in Queensland it was $78,143, up 8.5 percent.

AHURI said family support “was found to be the single biggest factor in supporting being able to buy a home. In Australia’s most expensive market, Sydney, where the median house price is currently $1.4 million and the median apartment value is above $830,000, according to the latest CoreLogic figures, AHURI says family support was an essential component of being able to buy a home in all cases …”.

The second factor boosting first home buying today is higher uptake of the Federal Government’s expanded Home Guarantee Scheme, which enables eligible buyers to qualify for a loan with just a 5 percent deposit and a government guarantee on the rest, saving them thousands of dollars in mortgage insurance.

Housing Australia says one in three of all first home buyers in FY23 used the scheme, up from one in seven in FY22. This reflects the expansion of the scheme, with more places funded by the Albanese Government and broader eligibility criteria enabling more people to participate.

Higher interest rates have also encouraged more participation, says Housing Australia’s head of research, data and analytics, Hugh Hartigan.

“The broader macroeconomic environment with rapidly rising interest rates has substantially decreased mortgage serviceability with flow-on effects for affordability and this has led to first home buyers relying more heavily (proportionally) on the scheme than in previous years,” Mr Hartigan said.



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Jennifer Lopez and Ben Affleck have officially put their massive Los Angeles mansion on the market for $68 million.

The lavish Beverly Hills property hit listing sites on Thursday, months after rumours began that the couple, who are reportedly estranged , were shopping the home around only a year after buying it for nearly $61 million.

The roughly 5-acre property—which is in a gated community and spans a massive 38,000 square feet—includes an indoor sports court with an adjacent gym and games room, according to the listing with Santiago Arana of the Agency. The firm declined to comment.

Lopez and Affleck paid $60.8 million for the compound in 2023.
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Built in 2000, the house has 12 bedrooms and a whopping 24 bathrooms. The resort-sized property has the amenities to match, including a V-shaped pool with views over the surrounding hills, a detached two-bedroom guardhouse and a 5,000-square-foot guest penthouse, according to the listing.

Listing images of the house show that Lopez and Affleck have spent the past year warming up what were fairly white-washed interiors when they purchased the home. There’s now a rich, green-painted dining room, hardwood floors and carpeted over cold, polished-stone flooring.

The couple, who got married in 2022 after reuniting some 20 years after they called off their engagement in the early 2000s, purchased the megamansion following a house hunt that went on for several months, The Wall Street Journal reported at the time.

Representatives for Lopez, 54, and Affleck, 51, did not immediately respond to requests for comment.

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