Since the introduction by the Federal government in October of the updated first home owner's grant, there has been a significant rise in the number of finance commitments for first home buyers. Australian Bureau of Statistics housing finance figures released today reveal that the monthly number of housing loans approved for first home buyers in Australia has risen from 8,818 in August 2008 to 14,484 in February 2009.
The proportion of first home buyer finance commitments has also risen strongly as a proportion of the overall number of housing loans. In February 2009 this proportion was at a historically high 27% compared to 16% in March 2008.
Dr Andrew Wilson, Senior Economist, Rider Levett Bucknall commented," The February figures reveal that the spike in finance commitments for first home buyers may be beginning to have an impact on the new housing market. The proportion of finance commitments for new housing construction has risen consistently over the past 4 months."
Victoria continues to lead the way in housing construction loans with 10.3% of total finance commitments directed to housing construction compared to New South Wales with only 4.6%. Total new dwelling finance commitments for Victoria were 1,271 in February compared with 725 for New South Wales.
New South Wales however performed comparatively strongly in the established housing market in February with 14,977 finance commitments compared with Victoria's 9,963. This data supports anecdotal evidence of increased buyer activity in the lower strata of the Sydney established residential market generated by first home buyer demand.
Dr Wilson continued, "The overall level of housing finance commitments remains weak compared to the same time last year. Given the apparent emerging impact of the revamped first home owners program in the established and new housing markets, and the timelines and lags involved, the case is certainly strengthened for the continuation of this scheme beyond June 2009."