The number of first-home buyers in the Canberra market has collapsed to a near-record lo. Photo: Nicki DaveyLatest data indicates the short-term prospects for the Canberra housing market remain mixed at best.
The ABS reports that the monthly number of owner-occupied home loans approved for the purchase of properties fell by 15.2 per cent over February to just 395. This was the lowest monthly number reported since December 2012 and is a poor result despite historically low interest rates and sharply improved affordability that has activated all other capital city housing markets.
A closer look at the ABS data reveals that the number of first-home buyers in the Canberra market has collapsed to a near-record low. Just 73 loans were approved for first-home buyers over February, the lowest monthly number recorded since June 2004.
The proportion of first-home buyers in the market unsurprisingly also remains at a near-historical low, accounting for just 6.5 per cent of home loans for purchases – well below the average of 14.3 per cent.
Changes to the local treatment of the first-home buyers’ grant last year, which precluded from eligibility the purchase of established properties after August, predictably caused a rush of activity and a drawing forward of demand from this group.
But the low activity from first-home buyers shows no signs of reversing, despite generous incentives for new home purchases, the lowest interest rates on record and almost no growth in house prices over the past four years in Canberra.
Investor activity in Canberra picked up over February, with the ABS reporting a rise of 42.3 per cent in the value of home loans to this group over the month.
Happy Easter to all my readers!
Dr Andrew Wilson is senior economist for Australian Property Monitors.
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