Morning Briefing: Victorian property most popular among first home buyers

Victoria tops the list again for first home buyer purchases... Non-bank lender sees record levels of loan applications...

Morning Briefing: Victorian property most popular among first home buyers
Victorian property most popular among first home buyers  
Over thirty per cent of the total number of Australian first home buyers that purchased during the December quarter were from Victoria.

The number of loans to first home buyers in Victoria increased by 9.5%, according to the December quarter edition of the Adelaide Bank/Real Estate Institute of Australia Housing Affordability Report. This represents a 2.1% decrease compared to the December quarter 2015.

In Victoria, first home buyers now make up 15.2% of the State’s owner-occupier market. More than 7,000 Victorians bought a first home in the December quarter. 
Adelaide Bank general manager Damian Percy said, “The good news is that there has been an increase nationally of 6.6% in the number of first home buyers for the quarter and an increase of 0.5% compared to the December 2015 quarter.

“The number of Australian first home buyers increased to 23,273 comprising almost 14 per cent of the owner occupier market.  Average loan sizes increased in NSW, Victoria, Western Australia and the Northern Territory.

“The bad news is that despite this increase in first home buyer numbers, it is still a figure well below the historical average of 18.5 per cent of the owner occupier market since the early 1990’s. Large land releases such as those recently announced in Victoria can be expected to improve opportunities to enter the market.

“Recent public lamentations on the plight facing first home buyers are welcome but one can’t help but think that the traditional unwillingness to confront those voters enjoying structural advantages that continue to keep a fire under house prices will lead to more gnashing of teeth rather than the lowering of prices. If current trends continue, young people in Sydney and, to a lesser extent, Melbourne will be living fabulous Facebook lives - but enduring real lives with lousy housing options”.

Non-bank lender sees record levels of loan applications 
Chifley Securities has posted record levels of loan applications worth $1.1 billion for the 2016 calendar year and in the second half of the 2016 calendar year it lifted lending to property developers and investors by 140% over the previous corresponding period.

Chifley Securities is finding strong demand from commercial and residential property developers and principal, Joe Morello says, “We are witnessing property developers being squeezed by very restrictive loan to valuation ratios now being imposed by the major banks.

“Meanwhile Chinese property developers and owners are also being squeezed by new foreign capital outflow restrictions being imposed by the Chinese Government, presenting a great opportunity for second and third tier lenders to fill the vacuum”, he said.

“2017 will be a year of managing the continuing growth in our lending as we are currently being approached by both large and small developers who are getting caught in the banks’ tighter lending policies.

“We are seeing growing demand for lending commercial finance at 65% loan to value and demand for construction finance reflecting terms which were previously accepted by the big four banks.”