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
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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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Mirvac’s 45-level Trielle has topped out at Yarra’s Edge, pairing riverfront apartments with wellness facilities, private dining and resident services.
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Mirvac has topped out Trielle at Melbourne’s Yarra’s Edge, with more than 70 per cent of the riverfront development sold and approximately 80 per cent of purchasers intending to make their apartment a home.
The figures, released on September 22, point to an owner-occupier audience for one of the precinct’s final residential towers. Mirvac began developing Yarra’s Edge in 2003, and its latest addition occupies one of the remaining absolute riverfront sites.
Mirvac CEO of Development Stuart Penklis said existing residents were among those moving up within the neighbourhood.
“Many purchasers already have a connection to Yarra’s Edge,” Mr Penklis said, describing buyers whose changing needs were encouraging an upgrade within the precinct.
“As one of the final residential towers within Yarra’s Edge, Trielle represents the culmination of more than two decades of creating one of Melbourne’s most established and sought-after waterfront communities,” Penklis said.
“Positioned on the Collins Street axis with absolute river frontage, Trielle offers residents a rare opportunity to enjoy sweeping views across the Yarra River, Melbourne skyline and Port Phillip Bay, while remaining seamlessly connected to the CBD. With Trielle now more than 70 per cent sold, we’re continuing to see strong demand from buyers seeking quality homes in established locations.”
The developer also flagged a penthouse and sub-penthouse collection with larger layouts, premium finishes and broad outlooks. The planned wellness centrepiece, The Oasis, encompasses a 900-square-metre elevated urban rainforest.
Mirvac General Manager Residential Development Victoria Elysa Anderson said Trielle had resonated strongly with buyers seeking a rare lifestyle offering in Melbourne.
“Opportunities to secure a new luxury residence on a riverfront site of this calibre are incredibly rare, particularly within a community like Yarra’s Edge,” Anderson said.
“What makes Trielle unique is the combination of exceptional views, world-class residential facilities and the lifestyle that already exists around it. Residents are buying into a mature waterfront community with parks, promenades, dining, wellness and strong community connections already in place.”
The 45-level tower brings a substantial new presence to that waterfront. Its residential offering spans one-, two-, three- and four-bedroom apartments, with Signature, Prestige and Sub-Penthouse collections accommodating different household sizes. The north-facing position connects the apartments visually to the river and city beyond.
Seven storeys above the promenade, the planned Oasis combines planting and a running stream with a Scandinavian-inspired wellness club developed with spa specialist Naomi Gregory. Facilities include a 25-metre lap pool, hot magnesium pool, sauna, hydrotherapy, a gym, yoga and Pilates room, and treatment spaces.
The amenity extends beyond exercise. Residents will have access to The Biblioteca library and workspaces, ground-floor work pods, and The Salone piano lounge. A private Chef’s Table dining room offers a setting for larger gatherings, while a cinema, games room and sports lounge broaden the entertaining options. Concierge services and a dog-wash area support everyday routines.
Trielle comprises a collection of one, two, three and four-bedroom residences. Reflecting strong demand from owner occupiers, approximately 80 per cent of purchasers to date intend to live in their homes, highlighting the project’s appeal to those seeking a long-term waterfront lifestyle.
Mirvac has recently delivered The Albertine, a premium apartment development on the edge of Melbourne’s CBD, and is nearing completion of Prince & Parade in Brunswick, further strengthening its portfolio of thoughtfully designed apartment communities in some of Melbourne’s most sought-after urban locations.
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