First home buyers have continued a shift back to the outer suburbs in the four months to August according to new NAB data, particularly in NSW and Victoria.

Between May and August, NAB lending to first home buyers surged 77 per cent on the corresponding period last year, with May the peak month. It also rose by 20 per cent against the first four months of 2021.

While the tree change was popular in 2020, there continues to be an increasing shift for first home buyers to opt for metropolitan areas in some states.

First home buyer activity in metro areas over this period increased by 24 per cent while regional areas are up 16 per cent for the same period.

NAB Executive Home Ownership, Andy Kerr said while affordability and the lockdowns across Sydney and Melbourne have impacted the market, first home buyers continued to find bargains.

“We recognise rising prices are creating an increasing challenge, particularly for first home buyers as supply remains below average,” Mr Kerr said.

“Lockdowns across Sydney and Melbourne have had an impact but we anticipate seasonality to return when we usually see a lot more stock come onto the marketplace during spring. We are optimistic that as NSW and Victoria continue to open up in coming weeks as vaccination rates increase, listings particularly in Melbourne will surge towards the end of 2021.

“What we’ve seen over the last 18 months during the pandemic is a big shift in the way many Australians are working. This has fundamentally changed home buyer options with locations based on hybrid working, opening up suburbs that haven’t been available in the past with the daily commute.

“The correlation between outer-metro suburbs and buying new builds in particular is certainly playing through in finding a bargain. Inner-city apartments are again drawing more attention as buyers eye areas where price growth is more subdued.”

“The most recent launch of the First Home Loan Deposit Scheme and the expanded suitability has seen continued momentum in first home buyer activity since July.”

Melbourne continues rebound, popularity of regional areas slows

The growth in FHB lending has been more localised than last year, when data showed rising activity across all corners of the country. Now, NSW and Victoria have continued strong growth through the middle of 2021 despite the impact of lockdowns.

On a year-on-year basis, NSW, Queensland and WA lead the way, with lending growth to first homebuyers topping 90 per cent.

In comparison to the first four months of this year, NSW/ACT is the frontrunner, with FHB activity up 29 per cent and driven strongly by metro areas. The only region to see a decline against the first four months of this year was regional QLD (-1%), but on a year-on-year basis it remains a strong performer (+56%).

Regional areas across the nation recorded an 88 per cent jump in FHB activity, while metro areas rose 85 per cent compared to a year ago. However, it’s a slightly different story against the preceding four months, with a 16 per cent increase in regional FHB activity as against a 24 per cent rise in metro.

“First-time buyers appear to be responding to price changes as our list of hotspots has changed significantly from June, with only five postcodes Australia-wide on both lists,” Mr Kerr said.

“Melbourne trailed all other cities in first homebuyer activity last year due largely to COVID-19 impacts and we continue to see an element of catch-up this year.

“While activity has slowed in regional areas in QLD and WA from the first few months of this year, in NSW and Victoria it’s clear the sea and tree change continue to be incredibly popular for first-time buyers.”

Location	May-Aug ’21 vs May-Aug ‘20	May-Aug ‘21 vs Jan-Apr ‘21
National	77% (Metro: 85%; Regional 88%)	20% (Metro: 24%; Regional 16%)
NSW/ACT	96% (Metro: 97%; Regional 103%)	29% (Metro: 30%; Regional 23%)
VIC/TAS	67% (Metro: 77%; Regional 91%)	26% (Metro: 32%; Regional 22%)
QLD	72% (Metro: 87%; Regional 56%)	1% (Metro: 5%; Regional -1%)
WA	71% (Metro: 67%; Regional 101%)	2% (Metro: 2%; Regional 4%)
SA/NT	52% (Metro: 56%; Regional 82%)	15% (Metro: 21%; Regional 18%)

 

First home buyer hotspots in 2021* (bold indicates postcodes that appeared in our June list):

The following metro postcodes have experienced a strong demand between May and August 2021:

Greater Sydney

2036 – including Matraville +134%

2077 – including Hornsby +47%

2114 – including West Ryde +228%

2147 – including Seven Hills +68%

2153 – including Baulkham Hills +38%

2160 – including Merrylands +80%

2170 – including Liverpool +56%

2200 – including Bankstown +50

2261 – including Bateau Bay +79%

2560 – including Campbelltown +70%

 

Regional

2340 – including East Tamworth +59%

2530 – including Dapto +32%

“Greater Sydney continued its momentum in May and June before the lockdown started to have an impact on first home buyer activity along with rising house prices,” Mr Kerr said.

“We still saw strong sales across July and August, with activity up 24% overall compared to the first four months of the year.

“There was huge growth in first home buyers just south of Sydney near Matraville and Eastgardens, again showing great demand in surrounding suburbs with nearby Maroubra a popular spot at the start of 2021. The west of Sydney continued to attract interest with West Ryde, Liverpool and Bankstown showing strong growth.

“The Central Coast stood out as an area of interest for first home buyers, offering an attractive lifestyle in the region. Dapto again proved to be a popular location for first home buyers just two hours south of Sydney.”

 

VIC

Melbourne

3006 – including Southbank +54%

3028 – including Altona Meadows +128%

3037 – including Taylors Hill +142%

3072 – including Preston +252%

3121 – including Richmond +39%

3141 – including South Yarra +88%

3805 – including Narre Warren +43%

3977 – including Cranbourne +31%

3024 – including Wyndham Vale +45%

 

Regional

3337 – including Melton +63%

3350 – including Ballarat +82%

3429 – including Sunbury +34%

“The west of Melbourne continues to go from strength to strength and offers some great options for first home buyers. Preston has jumped out as a popular hotspot with nearby Northcote and Thornbury offering the best of Melbourne’s inner-north lifestyle.

“Cranbourne and Narre Warren in the south-east were again a standout with great access to public transport and the gateway to regions like the Mornington Peninsula and Gippsland.

“Closer to Melbourne, apartment living in Southbank and Richmond provides appealing inner-city living and affordable options for first home buyers.”

 

QLD

Brisbane, Gold Coast and Sunshine Coast

4007 – including Hamilton (+108%)

4110 – including Acacia Ridge (+115%)

4078 – including Forest Lake +37%

4208 – including Ormeau (+37%)

4215 – including Southport (+31%)

4300 – including Springfield Lakes (+51%)

4500 – including Bray Park (+60%)

 

Regional

4211 – including Beechmont +39%

4740 – including East Mackay (+55%)

“First home buyers have capitalised on the apartment boom in trendy Hamilton, right on the fringe of the Brisbane River,” Mr Kerr said.

“Acacia Ridge in Brisbane’s south grew in popularity supported by access to shopping, restaurants and TAFE Queensland. Bray Park also presents an opportunity to buy an affordable home in an established area just 20km to Brisbane’s CBD. Southport just north of Surfers Paradise has proved a popular hotspot for first home buyers seeking a lifestyle on the Gold Coast.”

 

WA

Perth

6025 – including Hillarys (+128%)

6027 – including Joondalup (+31%)

6056 – including Midland (+77%)

6064 – including Girrawheen (84%)

6153 – including Mount Pleasant (+72%)

6069 – including Ellenbrook (+48%)

6163 – including Kardinya +35%

 

Regional

6430 – including Kalgoorlie (+70%)

“First home buyers have flocked north of Perth to suburbs like Girrawheen and Hillarys, which is one of the city’s premier recreational destinations by the water,” Mr Kerr said.

“Kardinya just south of the city again proved popular for first home buyers while the riverfront suburb of Mount Pleasant offers opportunity for apartment living.”

 

SA

Adelaide

5042 – including Pasadena (+82%)

5159 – including Aberfoyle Park (+35%)

“The southern suburbs of Adelaide have proven popular with first homebuyers in Pasadena situated between two train lines and close to Marion shopping centre,” Mr Kerr said.

“Further south, buyers have looked to Aberfoyle Park, in close proximity to the McLaren Vale wine region and the south coast.”

 

ACT

2615 – including Holt (+24%)

2905 – including Calwell (+245%)

 

TAS

7050 – including Kingston +105%

 

*Based on growth in NAB sales May to August 2021, versus January to April 2021.