First-home buyers in Queensland are boosting their presence in the housing market, with their market activity reaching its highest level in 11 years, according to the Australian Bureau of Statistics (ABS).
New loan commitments from first-home buyers increased by 70% year over year in September, reaching the highest level since June 2009. Over the month, first-home buyers comprised 41% of new loan commitments for the purchase of dwellings.
Adam Empringham, sales director of Image Property, said one indication of strong buyer interest is the increase in the non-renewal of rental leases.
"We have had about 30 tenants indicate to us that they wouldn’t be renewing their leases in the past few months because they intend to buy their first home instead. This is far more than what is usually recorded and is a strong indicator of the desire of prospective homebuyers to become property owners themselves," he said.
Empringham said measures by the federal and state governments to spur activity in the housing market are supporting the sentiment of many would-be buyers.
"We have a number of government grants and concessions for first-time buyers which is bringing forward their property ownership plans. All in all, market conditions across the southeast are strong, with signs of more positivity to come when borders reopen to a predicted surge of interstate migrants early next year," he said.
The historic low cash rate of 0.1% is also going to help boost affordability of mortgages, especially if banks pass on the cut in full, said Adrian Kelly, president of the Real Estate Institute of Australia.
"The interest rate cut, if passed on, would see the proportion of income required to meet loan repayments decreasing to 33.9%," he said.
Tim Lawless, head of research at CoreLogic said the historic low rates will complement the initiatives from the government to support housing.
“The stimulus of such extremely low-interest rates, together with the initiatives announced in the federal budget and state-level incentives like stamp duty concessions and building grants, are likely to be enough to outweigh the headwinds facing the market,” he said. “Headwinds include the wind-down of fiscal support such as JobKeeper, and the expiry of home loan repayment deferrals, which are moving through their peak period of expiry this month.”