Lending to first homebuyers hit a new record high in April, according to new NAB data, but the rush into regional areas has slowed from last year’s remarkable growth.

In the first four months of 2021, NAB lending to first home buyers surged 67 per cent on the corresponding period last year, with April the peak month. It also rose by 9 per cent against the final four months of 2020.

The figures show outer metro suburbs are the most in demand, while inner-city apartments are drawing more attention as buyers eye areas where price growth has been subdued.

The news comes as NAB begins accepting applications for places in the next round of the First Home Loan Deposit Scheme, in advance of the July 1 release date, which will help thousands more Australians into their first home.

“The level of first homebuyer activity has been like nothing we’ve seen in a generation,” NAB Executive, Home Ownership, Andy Kerr said.

“We’ve received very strong demand for the First Home Loan Deposit Scheme (FHLDS) and are excited to re-open our doors to customers interested to buy their first home with support from the Scheme. We expect interest to again be incredibly strong.

“Record low interest rates and government incentives continue to support demand and it’s been great to hear stories of some customers purchasing their first home earlier than expected.

“However, we also recognise rising house prices are creating a challenge for some Australians as supply levels remain below average.”

Melbourne rebounds, 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, Victoria has started to turn from laggard to leader, ahead of any potential impact from its latest lockdown.

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

In comparison to the final four months of last year, Victoria is the frontrunner, with FHB activity up 26 per cent and driven entirely by metro areas. The only region to see a decline against the final four months of last year was NSW/ACT (-4%), but on a year-on-year basis it remains a leading performer (+76%).

Regional areas across the nation recorded an 84 per cent jump in FHB activity, while metro areas rose 65 per cent compared to a year ago. However, it’s a different story against the preceding four months, with a 4 per cent dip in regional FHB activity as against a 13 per cent rise in metro.

“First-time buyers appear to be responding to price changes as our list of hotspots has changed significantly from December, 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 have seen an element of catch-up this year.

“It’s been interesting to see activity slow in regional areas from the final few months of last year, but over a 12-month period it’s clear the sea and tree change has been incredibly popular for first-time buyers.”

Location	Growth Jan-Apr ‘21 vs Jan-Apr ‘20	Growth Jan-Apr ‘21 vs Sept-Dec ‘20
National	67% (Metro: 65%; Regional 84%)	9% (Metro: 13%; Regional -4%)
NSW/ACT	76% (Metro: 70%; Regional 107%)	-4% (Metro: -3%; Regional -11%)
VIC/TAS	48% (Metro: 47%; Regional 55%)	26% (Metro: 29%; Regional -3%)
QLD	94% (Metro: 104%; Regional 72%)	18% (Metro: 23%; Regional 5%)
WA	92% (Metro: 80%; Regional 175%)	21% (Metro: 19%; Regional 28%)
SA/NT	55% (Metro: 45%; Regional 97%)	4% (Metro: 15%; Regional -23%)

 

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

NSW

Greater Sydney

2138 – including Rhodes +291%

2035 – including Maroubra +238%

2010 – including Darlinghurst, Surry Hills +166%

2763 – including Acacia Gardens +80%

2150 – including Parramatta +87%

2216 – including Rockdale +61%

2066 – including Lane Cove +55%

2229 – including Caringbah +45%

2760 – including Saint Mary’s +45%

Regional

2530 – including Dapto +54%

2444 – including Port Macquarie +30%

2250 – including Gosford +17%

“While higher prices may be having an impact on first homebuyers in NSW, it’s notable that April saw the second-highest activity on record in both metro and regional areas. The strength of the past two months in particular suggest that first homebuyers remain incredibly active.

“The west continues to drive plenty of interest, from Rhodes right through to Saint Mary’s. Parramatta stands out as the only postcode in Sydney that made our list of hotspots in both December and now. The south-west has comparatively slowed off the significant demand we saw last year, while the strong performance of Surry Hills may be a bit of an outlier as growth in surrounding suburbs was modest,” Mr Kerr said.

“Coastal towns in regional NSW remain a popular choice, with Port Macquarie one of the five areas to feature on the list of hotspots now and back in December.”

VIC

Melbourne

3149 – including Mount Waverley +180%

3121 – including Richmond +163%

3136 – including Croydon +155%

3806 – including Berwick +146%

3750 – including Wollert +64%

3150 – including Glen Waverley +59%

3021 – including St Alban’s +51%

3046 – including Glenroy +45%

Regional

3630 – including Shepparton +129%

3400 – including Horsham +123%

3500 – including Mildura +73%

3844 – including Traralgon +59%

“Victoria – and specifically Melbourne – stands out for its growth in the first four months compared to the tail-end of last year, but there really isn’t much pattern to it,” Mr Kerr said.

“The end of the train lines, particularly to the south-east remain popular, where there is easy access to the Mornington Peninsula continues to draw plenty of buyers. This includes areas like Dandenong, Cranbourne and Frankston, which only just missed making the list and were among the top performers last year.

“Perhaps the biggest change is the signs of interest in inner-city areas like Richmond and Southbank, where apartments are likely to be the main purchases for first-time buyers.

“In regional Victoria, the hotspots are spread far and wide, with price growth perhaps slowing activity in some areas.”

QLD

Brisbane, Gold Coast and Sunshine Coast

4006 – including Fortitude Valley +486%

4170 – including Morningside, Cannon Hill +110%

4068 – including Indooroopilly +102%

4017 – including Bracken Ridge +90%

4122 – including Mount Gravatt +87%

4551 – including Caloundra +53%

4218 – including Broadbeach +39%

4053 – including Everton Park +36%

Regional

4811 – including Stuart (Townsville) +221%

4814 – including Aitkenvale (Townsville) +72%

4670 – Bundaberg +72%

4350 – Toowoomba +31%

4211 – including Beechmont +23%

“The most notable change in Brisbane is the interest in Fortitude Valley, where it’s likely apartments are the focus for first home buyers. There’s plenty of other areas that have made the list in Brisbane, while Broadbeach on the Gold Coast and Caloundra on the Sunshine Coast are also proving popular this year,” Mr Kerr said.

“Further north, and Townsville is again a standout. While different suburbs to December, it’s clear Townsville is hot property for first-time buyers.”

WA

Perth

6055 – including Caversham, Guildford +73%

6163 – including Kardinya +63%

6164 – including Cockburn +54%

6027 – including Joondalup +53%

6112 – including Armadale +37%

6018 – including Innaloo, Churchlands +27%

6061 – including Mirrabooka +22%

Regional

6210 – Mandurah +110%

6280 – Busselton +22%

6530 – Geraldton +20%

“As we saw in December, you don’t need to travel too far from the CBD to find popular suburbs for first homebuyers. Again, areas north of the Swan are proving slightly more popular, with sustained demand around Mirrabooka and rising interest in areas north-west from Churchlands all the way up to Joondalup,” Mr Kerr said.

“Looking south and Armadale stands out as it appeared on our hotspot list in December. The area from Kardinya down through Cockburn to Hammond Valley is also in strong demand. Like other capitals, apartments in and around the city appear to be drawing more first-time buyers, with the eastern side of Perth’s CBD seeing a jump in demand, albeit off a low base.

“Outside the capital, Geraldton, with its access to the celebrated Coral Coast, continues to draw plenty of attention, while Mandurah – easily accessible from Perth – has seen the greatest lift in demand in 2021.”

SA

Adelaide

5070 – including Payneham +473%

5000 – including CBD +82%

5074 – including Campbelltown, Newton +42%

Regional

5251 – including Mt Barker +76%

“Apartments in the CBD have seen strong demand from first homebuyers through the first few months of 2021, while north-east of the city centre has also been popular, where the Adelaide Hills and Barossa Valley become even more accessible,” Mr Kerr said.

“In regional areas, Mt Barker shone as first home buyers consider the lifestyle benefits of living in the largest town in the scenic Adelaide Hills.”

ACT

2611 – including Molonglo +67%

2913 – including Palmerston +34%

2914 – including Amaroo +21%

TAS

7008 – including Lenah Valley +259%

Background:

• NAB was the first bank chosen to support the Federal Government’s First Home Loan Deposit Scheme and more than 5,000 NAB customers have now settled into their first home with the help of the scheme.