First home buyers are flocking to the suburbs

Aussies are snapping up their first homes in the outer suburbs, a big bank’s data reveals, eschewing the trend of living in city centres as modern lifestyles evolve.

The value of owner-occupier loans reached a record high in October, according to the Australia Bureau of Statistics (ABS) -- and driving 35 per cent of these commitments were first time home buyers.

Now data from NAB is offering insight into where first time buyers are choosing to make their homes.

The big bank experienced a 21 per cent lift in first time buyers over the year -- a timeframe that covers the disruption brought by the pandemic.

And the number of them picking up a property in a regional area surged by 44 per cent in the three months to October.

“First home buyers are back in the market at levels we haven’t seen for a decade,” Andy Kerr said, executive of home ownership at NAB.

“Demand has been supported by historically low interest rates and more government support, such as the First Home Loan Deposit Scheme and HomeBuilder.

“A brief pullback in property prices also helped (them) as the uncertainty of COVID-19 put many plans on ice.”

Where exactly are they buying?

About 57 per cent more first time buyers purchased a home in regional New South Wales, in areas including Ballina, Port Macquarie and the Central Coast. Another 17 per cent purchased a place in metro areas, such as western Sydney’s Abbotsbury, Campbelltown and Penrith.

Western Australia followed closely with 55 per cent more first time buyers purchasing a home in regional areas, trailed by Queensland at 44 per cent, SA and NT at 36 per cent, and Victoria and Tasmania at 30 per cent.

“Flexible working arrangements implemented due to COVID-19 are encouraging many Australians to consider a tree or sea change as easy access to the CBD moves down the priority list,” Mr Kerr said.

“Many are seeing the potential of more land and a more relaxed lifestyle with easy access to areas like the Blue Mountains in NSW and Great Ocean Road in Victoria proving very popular.”

The shift has seen regional home prices grow at more than twice the rate of city properties. Regional home values lifted by 5.7 per cent in the last 12 months, according to CoreLogic, compared to the 2.4 per cent increase of capital city home values.

What’s encouraging first home buyers to sign now?

All time cheap mortgages coupled with government support and handouts are giving people the confidence to buy their first homes.

The cash rate -- a marker used by banks to set interest on mortgages -- is at 0.10 per cent, a level not seen before. And the Reserve Bank of Australia has said it’s likely to stay that low for three years.

The government has also helped by making it easier for people to sign up to a home loan. The first home loan deposit scheme makes it possible for people to secure a mortgage with a 5 per cent deposit -- and they don’t have to worry about saving thousands more for lenders mortgage insurance, because the government guarantees the other 15 per cent shortfall.

• Government’s first home buyers were able to buy four years quicker

There were two tranches of the first home loan deposit scheme made available this financial year, giving 20,000 people a hand in entering the property market. Those part of the second tranche would’ve had to purchase a new or newly built home in order to qualify.

But they could’ve also benefited from the government’s Homebuilder scheme. It offers eligible people a $25,000 grant if they spend from $150,000 to $750,000 to either renovate or build a new home.

These two subsidies -- coupled with record cheap mortgages -- likely helped the home loan market bounce back from the disruption of the pandemic, and then reach a new record of loan commitments signed in October.

A breakdown by postcode

NSW

Greater Sydney

2127 – including Newington +70%

2150 – including Parramatta +66%

2174 – including Abbotsbury +157%

2560 – including Campbelltown North +48%

2570 – including Camden & Oran Park +38%

2747 – including Llandilo & Cambridge Park +54%

Outside Sydney

2259 – including Wyong (Central Coast) +111%

2287 – including Wallsend (Newcastle) +65%

2444 – including Port Macquarie +143%

2478 – including Ballina +148%

VIC

West of Melbourne CBD

3217 – including Armstrong Creek +97%

3216 – including Waurn Ponds & Belmont +56%

3338 – including Melton South +38%

3029 – including Tarneit & Hoppers Crossing +22% (postcode with most lending to FHB in the state)

East of Melbourne CBD

3196 – including Chelsea and Edithvale +60%

3175 – including Dandenong +50%

3174 – including Noble Park +32%

3978 – including Clyde +32%

3810 – including Pakenham +27%

3977 – including Cranbourne +23%

Queensland

South-east

4118 – including Browns Plains (Logan City) +106%

4209 – including Coomera (Gold Coast) +94%

4300 – Greater Springfield (Ipswich) +67% (most lending)

4305 – Central Ipswich +93%

4306 – including Karrabin (Ipswich) +58%

4509 – including North Lakes (Brisbane) +99%

North and west

4817 – including Hervey Range and Bohle Plains (Townsville) +64%

4825 – including Mount Isa +115%

WA

Perth

6061 – including Nollamara & Mirrabooka +107%

6062 – including Morley +78%

6107 – including Cannington +63%

6110 – including Huntingdale +91%

6112 – including Armadale +63% (most lending)

Regional

6430 – Kalgoorlie +62%

6530 – Geraldton +117%

SA

5085 – including Clearview and Enfield +52%

5086 – including Oakden and Hillcrest +51% (most lending)

5108 – including Salisbury +68%

Compare home loans in Australia