Nationally, first home buyer activity declined 5.8 per cent over the 12 months to December 2018, while softening markets New South Wales and Victoria saw first home buyer activity increase by 2.6 per cent and 1 per cent respectively, according to the latest PRDnationwide report.
And while dwelling approvals declined across Australia by 21.7 per cent for the 12 months to February 2019, also allowing for stock to be absorbed, PRDnationwide national research manager Dr Asti Mardiasmo says “there are strong economic fundamentals presently in play”.
“It will be interesting to see how the flow on effects from the federal election 2019 results will impact consumer sentiment and first home buyers.”
Providing a snapshot of Australia’s current state of the market from an economic and property perspective, PRDnationwide's key market indicators for the second quarter reveal the number of loans to first home buyers, home loan affordability index, number of dwelling approvals, consumer sentiment index, standard variable loan, consumer price inflation index, unemployment rate, weekly family income and net migration.
NEW SOUTH WALES
Increasing affordability is a continual pattern in the state, marking good news for buyers in the market.
New South Wales also saw the highest number of dwelling approvals, at 5,018 in February this year. While this represents a 15.3 per cent decline over the 12 months to February, Mardiasmo says the high number of dwellings approved will further increase property supply and provide first home buyers and buyers alike with more choices.
NSW has experienced an increase in first home buyers, with 7,634 of first home buyer loans approved, a 1.7 per cent increase, in the December quarter of 2018.
Victoria leads the nation for first home buyers with 8,855 loans approved between the December quarters of 2017-2018.
Dwelling approvals in the state dropped by a 24.6 per cent over the 12 months to February 2019.
“This allows for current stock to be absorbed, particularly those in Melbourne, however it also creates an opportunity for developers wanting to create niche product offerings.”
Historically known as the more affordable state in comparison to New South Wales and Victoria, the report expects Queensland to have solid property growth indicators and economic fundamentals for the remainder of this year.
Queensland's net migration was recorded at 15,206 people in September 2018, reflecting 22.2 per cent growth over the past 12 months.
“With an increasing population comes property demand, however, dwelling approvals in Queensland have declined by 35.3 per cent over the past 12 months to February 2019,” Mardiasmo says.
“In one aspect, this allows for current stock to be absorbed, particularly those in Brisbane, however it also creates an opportunity for developers wanting to create niche product offerings.”
Australia’s political engine room, the Australian Capital Territory continues to show strength with solid economic fundamentals with low unemployment levels, and high median weekly family income.
“That said, dwelling approvals have declined significantly in the ACT by 35.8 per cent over the 12 months to February 2019,” Mardiasmo said.
“This is not surprising as there has been high dwelling development activity in the ACT over the past 18-24 months.”
Western Australia leads the nation in net migration growth, increasing by 184.5 per cent over the 12 months to September 2018.
South Australia recorded an increase in first home buyer loan approvals over the past 12 months to December 2018 with 1645 loan approvals, equalling 9.4 per cent growth. While net migration in the state has increased by 45 per cent for the 12 months to September 2018.
“Which is the second highest level of net migration growth across all states,” Mardiasmo said.
“Australian consumer sentiment read 100.7 index points in April 2019, exactly on the positive line of 100 index points, indicating that in general, Australians have a positive yet cautious outlook on the economy,” Mardiasmo said.