The number of loans to owner-occupiers in Australia increased 1.9 percent in May, exceeding the market forecast of a one-percent increase.
Figures from the Bureau of Statistics in Australia showed the increase was smaller, with the seasonally adjusted number of home loans increasing 0.4 percent.
The first-time homebuyer market also seemed to have reached its bottom after the First Home Owner Boost was removed at the end of last year. The proportion of first-time homebuyers has stabilized at around 18 percent of all the loans written, exceeding the 17.7 percent result in April 2010. However, this was lower than the result seen a few years before the global economic crisis emerged, when 20 percent of the total loans came from first-time homebuyers.
With the interest rates unchanged in June and July, there will be a few more modest increases in the number of loans written when the mid-year numbers emerge, and the numbers of first-time homebuyers will be drifting upwards again. A population growth, strong labour market, pent-up demand and increasing incomes should ensure that the overall housing demand does not decline too much further.