Analysis of broker-originated loans has shown that their first home buyer clients are increasingly looking outside of the major capital cities for their homes.
According to an analysis of over 3,000 property transactions made by mortgage brokers in the HashChing network this calendar year, first home buyers (FHBs) are increasingly buying property outside of the main capital cities, as property prices continue to escalate.
HashChing’s 2021 State Of The Market data shows that 45 per cent of the 3,000 broker transactions were for FHBs, with the greatest proportion of FHB transactions written by HashChing brokers coming from borrowers in Victoria (37 per cent), followed by NSW (26 per cent) and Queensland (23 per cent).
However, most states were seeing the greatest proportion of FHB activity happening outside of the capital cities.
Those in Queensland were particularly flocking to certain postcodes en masse. Toowoomba (4350) has become a mecca for FHBs in Queensland, accounting for a fifth of all Queensland FHB transactions, according to the HashChing data.
Nearby postcode 4352 (St Aubyn) comprised 4 per cent of transactions, making the two postcodes along the A3 particularly popular with those first getting onto the property ladder for the first time.
In the ACT, the border town of Dunlop was proving popular, with 11 per cent of all FHB transactions in the state being for homes in the postcode 2615, followed closely by 2914 (Amaroo) with 10 per cent.
In South Australia, Port Lincoln (5606) was attracting 8 per cent of all FHB transactions lodged by HashChing brokers, and, over in Western Australia, the lighthouse town of Bunbury was the most popular location for FHBs, taking 6 per cent of all FHB transactions in the state.
Tasmania was the only state to see a marked concentration of FHB activity in its capital – with the top three postcodes for FHB activity being 7008 (Lenah Valley) – which took 12 per cent of transactions – with neighbouring 7000 (North Hobart) a close second at 11 per cent and 7018 (Tranmere) coming third with 9 per cent.
In NSW and Victoria, FHB activity was more widely spread across the whole state – with no postcode taking more than 2 per cent of all FHB transactions.
In NSW, the Greater Western Sydney postcode of 2145 (Pemulwuy) had the largest proportion of FHB transactions (2 per cent), while in Victoria it was the Melbourne suburbs of 3977 (Devon Meadows) and 3064 (Roxburgh Park) that saw the most activity (2 per cent each).
Speaking of the figures, HashChing chief executive Arun Maharaj noted that FHBs were typically “younger [borrowers on] lower budgets”, who would typically look at “areas with a sweet spot of good commuting options into capital cities, affordable housing and/or nearby recreational areas seeing high transaction numbers.”
However, he noted that the lack of hotspots in NSW and Victoria suggested there was “market failure” in these states.
“The housing market has not created appealing centres of entry-level property for this embattled group,” he explained.
“This results in buyers choosing to save more and compete with buyers higher up the ladder rather than relocate, or to choose to purchase their first home elsewhere.
“From the data, it looks like Hobart is the prime beneficiary of this trend, which saw high first home buyer activity in centralised locations, with Adelaide’s southern postcodes also seeing significant activity, which suggests first home buyers are finding refuge there from other states.
“What’s happening in Queensland however shows that there is hope. With such a massive percentage of first home buyers choosing Toowoomba and its surrounds, the city can pride itself on creating the right mix of affordable housing, employment opportunities and transport to tempt first home buyers to start their journey there.
“NSW and VIC should take notes. You can’t help but have sympathy for first home buyers in these two states,” he said, highlighting that borrowers would benefit from using a broker to help provide informed assistance.
“Hashching which can help them find the right brokers to guide them through their options.”
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.
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