New data from National Australia Bank says mortgage lending for first-home buyers at record levels

New data from one of Australia’s major banks reveals buying has reached record levels and is fuelling a mass migration.

National Australia Bank says young borrowers are flocking to outer suburbs and regional Australia in order to get into the property market through first-home buying schemes.

Lending data from the major bank has revealed a surge in buying for first-time home lenders, who are taking advantage of record low interest rates, dips in property prices and access to the first-home buyers deposit scheme.

NAB is one of the two major banks that were assigned first-home buyers deposit places under the federal government scheme.

The scheme allows a first-home buyer to secure a mortgage with a 5 per cent deposit instead of the traditional 20 per cent that is needed to gain a home loan without obtaining lenders mortgage insurance. The 15 per cent difference is guaranteed by the commonwealth government.

The bank found in the three months ending October 31, house financing for first-home buyers rose 21 per cent compared with the previous period, driven primarily by residential purchases in Western Australia, Queensland and regional NSW.

On a national level, metropolitan first-home buying grew 17 per cent over the period, while regional uptake grew 44 per cent.

NAB executive Andy Kerr said the mortgage rush from first-home buyers was at a level not seen in more than a decade.

Outer suburbs and regional areas are attracting first-home buyers. Picture: Supplied.

“As a result, many of our customers are telling us they are getting their dream home earlier than they thought possible, which is great news,” Mr Kerr said.

“Demand has been supported by historically low interest rates and more government support, such as the First Home Loan Deposit Scheme and HomeBuilder. A brief pullback in property prices also helped first-home buyers, as the uncertainty of COVID-19 put many plans on ice, with investor demand slowing noticeably.”

Victoria had the lowest levels of new buyers due to its delayed reopening from the pandemic, while Queensland experienced the largest uptake in first-home buying in metropolitan areas, up 35 per cent.

There were more new entrants in the Sunshine State than anywhere else in the country, with the major buying areas Logan, Coomera and North Lakes.

Mr Kerr said Queenslanders seemed to be more comfortable in buying properties that were more than an hour away from major hubs such as the Brisbane CBD.

Regional NSW had the largest rise, up 57 per cent over the three months, with the Central Coast, Newcastle and Ballina among some of the most popular buying spots.

Queensland has the biggest uptake of first-home buyers. Picture: Richard Walker

“There’s positive stories across regional NSW, particularly coastal towns, with the Central Coast one of the most significant growth areas for first-home buyers in the country,” Mr Kerr said

“The access to quality beaches and more relaxed lifestyle are also obvious drawcards further north in and around Port Macquarie and Ballina.”

Western Australia had the second highest regional uptake, 55 per cent increase, with the most popular buying spot being Geraldton.

“Flexible working arrangements implemented due to COVID-19 are encouraging many Australians to consider a tree or sea change as easy access to the CBD moves down the priority list,” Mr Kerr said.

“Many are seeing the potential of more land and a more relaxed lifestyle with easy access to areas like the Blue Mountains in NSW and Great Ocean Road in Victoria proving very popular.”

NAB said it expected this momentum to continue through 2021.

According to the major bank, Newington, Parramatta, Camden and Oran Park were among the most popular suburbs for first-home buyers in greater Sydney.

In Melbourne, the major suburbs were Armstrong Creek, Waurn Ponds, Chelsea and Dandenong.