Australia’s housing market has become harder for first-home buyers to access over time. The past two decades saw an increase of around 150% in the CoreLogic Home Value Index nationally, compared with an 82% rise in the ABS Wage Price Index. As a result, the wealth of property owners looking to buy their next home is likely to have increased faster than a prospective first buyer can accumulate savings. This is reflected in falling rates of home ownership, a deterioration in affordability metrics, and an increase in the average age of first-home buyers over time.   

Head of Research Australia at CoreLogic Eliza Owen, however, puts a lens on the ABS ‘lending indicators’ data which may seemingly paint a different picture of first home buyer numbers.

The ABS ‘lending indicators’ data includes a monthly update on the number, and combined value, of loans secured for first home purchases. The total value of first home buyer finance secured in February was over $4.9 billion, rising 4.8% over the month in seasonally adjusted terms. Despite high-interest rates, a cost of living crisis, low consumer sentiment, and a sharp reduction in the household saving rate, first home buyer finance has been growing as a share of all owner-occupied finance secured since August 2022, reaching 29.2%, and rising above the decade average (figure 1).

Does this mean first-home buyers are finding it easier to buy property? Not necessarily. Importantly, figure 1 is a share of all owner-occupied finance. The figure can go up if first-home buyer finance is increasing, but it can also go up if non-first-home buyer finance is growing at a slower rate or is falling.