Reserve Bank Data Shows First Home Buyers’ Share of Mortgage Money at High Levels While Investor Share Increases Slightly in January 2024

Date Published: 28 February 2024

Key Facts

• The housing market saw a 23% year-on-year rise in mortgage advances for January 2024, despite the comparison to January 2023’s figures being one of the lowest monthly tallies recorded in a decade.
• January 2024’s committed mortgage funds of $3.413 billion indicated a 23% increase from January 2023’s $2.775 billion. However, it also represented a 35.6% drop compared to December 2023.
• First-time home buyers (FHBs) claimed 24.1% of the mortgage money in January 2024, with their share totaling $822 million.
• FHBs has risen from a 10.5% share in 2015 to 23.6% in 2023, partly due to the Reserve Bank’s stricter deposit requirements for investors introduced in 2016.
• Investors’ share of the mortgage monies dropped from 32% to 17% over approximately the same period, although their share rose to 17.8% in January 2024, a significant increase from their 15.4% share in January 2023.

Article Summary

New data shows a 23% year-on-year increase in mortgage advances for January 2024, suggesting buoyancy in the housing market. However, this rise might not be as impressive as it seems, given that the 2023 figure was one of the lowest in recent years. Also, January 2024’s figure is a significant 35.6% drop from the previous month, December 2023.

First-time home buyers (FHBs) claimed a considerable stake, representing 24.1% of the mortgage money for the month. This still-high figure, albeit down from December 2023’s record-breaking 25.2%, signifies the increasing presence of FHBs in the market. This trend has been observed since the Reserve Bank introduced stricter deposit requirements for investors in 2016, making the marketplace more accessible for FHBs.

Investor activity, conversely, has waned. Investors’ share of mortgage funding has dipped from 32% to 17% over the years, essentially inverting the trend seen with FHBs. However, investor activity seems to be on the rise again, as they took up 17.8% of the total mortgage money for January 2024—their highest share since December 2022. The political environment and favourable policies—such as the reintroduction of interest deductibility—could be encouraging this trend.

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