FHB market share near 8-year low: NAB

The NAB Residential Property Survey 3Q 2023 has found that the overall market share of first home buyers (FHBs) in new housing markets dropped to a “near eight-year low” of 30.3 per cent in the third quarter from 35.9 per cent in the 2Q23.

The number of FHB owner-occupiers fell to 20.9 per cent from 25.2 per cent in the previous corresponding period, down to its lowest share reported since the first quarter of 2017, while FHB investors fell to 9.4 per cent from 10.7 per cent.

The overall number of FHB in new housing markets is now tracking “well-below” the survey average of 38.5 per cent, according to NAB.

The lowest and heaviest falls were recorded in both NSW and Victoria, down to 24.6 per cent from 41.7 per cent, and 29.4 per cent from 35 per cent, respectively.

Meanwhile, the overall share of FHBs in the market was the highest in South Australia, increasing from 50 per cent in Q2 to 52.5 per cent. Increases were also recorded in Queensland (33.8 per cent in Q3 from 28.8 per cent) and Western Australia (31 per cent from 24.2 per cent).

In terms of sales, FHB owner-occupiers accounted for the smallest share of total sales in NSW at 14.4 per cent and the highest in South Australia at 30 per cent, however, FHB investors accounted for the smallest share of sales in Queensland (5 per cent) and the largest in South Australia (22.5 per cent).

However, the market share of sales to owner-occupiers (net of FHBs) grew in 3Q23, reaching an 11-year high of 41.8 per cent, up from 39.4 per cent in the previous quarter, and trended above the average of 35.6 per cent, NAB’s survey found.

The major bank’s survey further indicated that the market share of sales to resident or domestic investors in new housing markets rose to 16.5 per cent in the third quarter (up from 15.2 per cent in Q2), despite higher interest rates.

However, NAB noted this was still below the levels seen in the first quarter of 2022 before interest rates began rising in May 2022 and below the survey average of 21.7 per cent.

One-third of FHB supported by government scheme

The fourth annual Home Guarantee Scheme Trends and Insights Report released by the formerly known National Housing Finance and Investment Corporation (NHFIC) – now known as Housing Australia – found that the number of home buyers taking advantage of the Home Guarantee Schemes in the 2022–23 financial year increased by 39 per cent from the previous year (up from 23,300 guarantees to 32,500).

The report revealed a particularly large increase in FHBs, with almost one in three FHBs being supported by the scheme during 2022–23, an increase from one in seven recorded during 2021–22.

[RELATED: 1 in 3 first home buyers used guarantee schemes]

Adrian Suljanovic is a journalist at Broker Daily with more than two years experience reporting on all facets of the third party distribution channel.

Adrian has written for a range of business and finance titles including IFA, Investor Daily and Lawyer’s Weekly before joining the mortgages team in 2022.

He graduated from the University of Wollongong in 2021 gaining a Bachelor of Communication & Media with a major in Digital & Social Media.

E-mail Adrian at: This email address is being protected from spambots. You need JavaScript enabled to view it.