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The resurgence of the FHB market puts pressure on certain property types

by xyonent
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New loan approvals have increased by nearly 10 percent since fall 2023, signaling a return to confidence among younger buyers.

Data from the Australian Bureau of Statistics (ABS) revealed that since March 2023, new loan commitments have increased by 9.9 per cent.

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Surprisingly, given the extreme cost of living stress many Australians are facing, young buyers may be experiencing a resurgence of optimism about the market.

Dan O’Loughlin, managing director at Barry Plant Pakenham, Drouin & Berwick, said: “We are definitely seeing confidence returning to the market, particularly among first-time home buyers who are feeling more secure financially.”

He found that in his own Melbourne suburban buyer demographic, “first-time buyers significantly outnumber investors and homeowners and, shockingly, make up around 70% of buyers looking for homes under $750,000.”

He found that this age group has a strong preference for new build detached homes with three or four bedrooms.

“Homes under 10 years old are in high demand, but older homes, especially those over 20 years old, are less attractive to buyers,” O’Loughlin said.

Despite the significant economic challenges currently facing the Australian housing market, O’Loughlin believes local housing market conditions will remain strong over the coming months.

“I suspect people want to maximize the stability of the current market rather than wait until the spring, which could bring further rate hikes and home price increases,” he said.

“May was a great month. We’re pleased to see the market performing strongly and don’t see it slowing down over the winter.”

There has been a surge in first-time home buyers as new research finds that the “Great Australian Dream is alive and well” among young aspiring home buyers despite severe financial pressures.

With inner-city house prices increasingly out of reach for all but the most affluent buyers, young Australians are turning to suburbs and regional towns in a bid to secure their first home without putting a strain on their wallets.

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