FHBs flock to outer suburbs: NAB

Despite the rising cost of living and consumer spending easing, NAB data has shown first home buyer activity remained steady in the second half of 2022, with many taking advantage of easing house prices and government support schemes.

Australian home values are anticipated to fall another 9 per cent this year, according to ANZ economist, Shane Oliver, which is on the back of a 8.4 per cent drop (between May and December 2022) according to CoreLogic. 

The fall in house values comes as inflation continues to run hot and interest rates pinch mortgage borrowers.

In addition, first home buyers have been arguably hardest hit by the rising costs and the hurdles in saving for a deposit, thus many have been leaning on home loan deposit schemes “more than ever”, according to earlier data from the Great Southern Bank.

Despite the economic challenges, NAB’s executive home ownership, Andy Kerr, said first home buyers “weren’t being deterred from entering the property market”, instead many were looking for opportunities for properties in high-growth areas.

“First home buyers are bucking the trend with sales staying stable nationally and growing in some of the hottest suburbs such as Schofields in NSW,” Mr Kerr said.

“Value and location remain the two most important factors for first home buyers when looking to purchase their first property.”

NAB’s sales from June to November 2022 showed that around one in 10 first home buyers in Victoria were attracted to growth areas to the north, west and south-east of Melbourne.

Mr Kerr said areas with good amenities, growing transport links, new schools and parks, and a more relaxed, suburban lifestyle such as Hoppers Crossing in Melbourne’s west or Craigieburn in the city’s north received top sales.

“Melbourne’s population is tipped to outpace Sydney’s by 2031 and these areas along key transport corridors will be where we continue to see that growth,” Mr Kerr said.

While he expects Melbourne will remain a top Australian location for first home buyers heading into 2023, Sydney’s north-west is close behind in popularity.

Sydney’s north-west suburb of Schofields topped the list of first home buyer hotspots in NSW, recording a 63 per cent jump in quarter-on-quarter demand at the end of last year.

Mr Kerr explained Schofields and Liverpool were some of the most in-demand suburbs for first home buyers on the back of several new housing developments and off-the-plan properties making them eligible for state government assistance schemes.

Further north, Queensland’s top first home buyer suburbs were in the Garden City of Toowoomba.

The regional centre is experiencing an “infrastructure boom” and first home buyers have been targeting the suburbs of Darling Heights and Drayton, Mr Kerr said.

In fact, three of the top five locations for first home buyers in Queensland were in regional cities outside of Greater Brisbane: Toowoomba, Mackay, and Bundaberg.

“Toowoomba has been going from strength-to-strength in past years, attracting families with its quick commute to Brisbane, schools, laidback lifestyle and spacious land sizes,” Mr Kerr said.

“With billions of dollars of investment coming down the pipeline on the Inland Rail Link and a new Toowoomba Hospital, the Garden City is shaping up as an exciting place to buy and live.”

Similarly, Adelaide and Perth’s outer metro growth areas like Hallett Cove, right near Adelaide’s southern beaches and suburbs south-east of Perth, which have great amenities have been attractive for young families.

“Adelaide’s southern suburbs continue to be in-demand locations for South Australian first home buyers,” Mr Kerr said.

“Transport upgrades make Morphett Vale, Woodcroft and Hallett Cove even more attractive places to live and commute into the CBD. Mt Barker is a gem in the Adelaide Hills, providing easy access to growing amenities and fresh air.”

Mr Kerr added that Perth’s south-east was “growing rapidly” with its transport corridors, employment as well as affordable and sustainable housing.

[Related: FHBs to lean on home loan deposit schemes]