Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

FHB demand soars, bucks credit trend

sold sign house ta sold sign house ta
Reporter 4 minute read

Home loan enquiries from the first home buyer segment have spiked despite record declines in overall lending volumes, according to new research.

Major broking franchise Aussie Home Loans has reported that home loan enquires from first home buyers (FHB) surged over the month of June, up 219 per cent from the previous corresponding period.

This comes despite a sharp drop-off in demand for housing credit across the broader market, with the latest data from the Australian Bureau of Statistics (ABS) revealing that the value of home loan approvals plunged 11.6 per cent (seasonally adjusted terms) to $16.4 billion in May – the largest fall in the history of the series.

This followed a 4.8 per cent decline in April, which was the sharpest fall since May 2015.


According to Aussie CEO James Symond, a combination of falling home prices, lower mortgage rates and stimulus from the federal government has helped keep FHB demand afloat amid the general slump in confidence off the back of the COVID-19 crisis.

“With property price growth dropping off, along with the lowest interest rates on record, and a range of government schemes on offer, if you are in good shape from an employment and income perspective, now could be a good time to get into the market,” he said.

FHB demand is also expected to be supported by the second phase of the federal government’s First Home Loan Deposit Scheme, which opened on 1 July.

The scheme first launched in January of this year, with 10,000 places being made available for the six-month period January to June 2020.

A further 10,000 places have now been made available for the 2020-21 financial year.


According to government figures, brokers facilitated approximately 44 per cent of all scheme placements, making it the most popular introduction channel in the scheme overall.

Mr Symond highlighted the utility of the broker channel amid research that found approximately 70 per cent of prospective FHBs were unsure how to capitalise on current incentives in the marketplace.

“While there is great enthusiasm among first home buyers, there are traps and a mind-boggling array of mortgage products available in the market, and as a result, they need to be properly informed and provided guidance from a broker to ensure they are making the right choice of finance,” he added.

“First home buyers need to understand how much they could afford, especially if rates rise again and [which] product suits their current income level and aspirations.”

[Related: FHBs confused over grants and schemes]

FHB demand soars, bucks credit trend
sold sign house ta
TheAdviser logo

sold sign house ta


more from the adviser
mario rehayem Pepper to 'widen' product and channel following IPO

The non-bank lender has revealed it will expand its product and c...

NAb building logo NAB sees applications rise 45%

The major bank saw a 45 per cent increase in mortgage application...

interest rate Citi reduces variable rates

The non-major bank has reduced variable rates by up to 20 basis p...