Is 2018 the Year of the First-Home Buyer?

Is 2018 the Year of the First-Home Buyer?

February 21, 2018

As we enter into the Chinese New Year: The Year of the Dog we wonder what 2018 has in store for property owners and first-home buyers alike.

It could be shaping up to be the year of the underdog. For almost a decade (since May 2009) first homeowners have struggled to make big numbers on the home loan front. In 2009 the number of mortgages that went to first homeowners was an incredible 31.4 percent.

With property prices rising rapidly and NSW homes getting wildly out of reach, the number of owner-occupiers applying for first-time loans plummeted, until now. Perhaps this is the year of the underdog.


In November 2017 the percentage of new home loans to first-time buyers (owner-occupier) rose to 18 %. That’s the highest first homebuyer ratio since 2012.

What’s more, that number could go even higher if you take into account the Reserve Bank’s recent decision to stick to the low home loan interest rate (1.50%), coupled with a dip in Sydney’s residential real estate prices.

CoreLogic Statistics anticipate that both Melbourne and Sydney property prices will drop another 7 percent this year and into 2019. However, market economists warn that the number of mortgages going to new owner-occupiers will probably hold steady rather than climb, having boomed in, it’s usual for the numbers to settle in for a while.

Another contributing factor that has given new homeowners a leg up recently is the stamp duty discount scheme offered on established homes as well as land. The number of monthly first homebuyer approvals has increased by more than 60 percent since the State government introduced the discount schemes in July 2017.


The change in the market makes owning a home for the first time in NSW not only possible but also easier. In 2018 the average number of days for first homebuyers to locate their ideal property is just 30 to 40. Many people are able to find their ideal home in just one month. Prior to this, finding the right first home, amid investors and skyrocketing auctions that pushed many first-timers out of the market, took an average of 60 to 90 days. That’s three months of house hunting, and possibly settling for less than desired.

Investors have had to take a bit of a back seat at auctions recently. Current evidence shows that investment properties are not making enough profit to tempt big sales. It’s now about making a smart decision and swooping on a bargain in order to see a higher return.

So while low interest rates and stamp duty discounts favour the first home buyer, regulatory and interest-only changes at the bank are making it difficult for investors to borrow within the profit margin. That means more space in the auction room for some new fresh faces.

If you have been saving for your first home, the market of 2018 gives you extra incentive to put those extra dollars away and make owning your own home a reality. It’s closer now than ever.

Peta Stewart – Certified Practicing Conveyancer


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