• Nationwide lending to first homebuyers is up 67% year-on-year in the first four months of 2021, according to newly released data from NAB.
• While first homebuyers are increasingly being pushed towards the outer suburbs, skyrocketing prices haven’t yet slowed lending, the figures suggest.
• The data also reveals a list of suburbs favoured by first homebuyers in 2021.
• Visit Business Insider Australia’s homepage for more stories.

While first homebuyers are flocking to the outer suburbs of Australia’s biggest cities as they are priced out of central hubs, lending is up a massive 67% compared to last year, new data reveals.

Figures released by NAB, which examine lending over the first four months of 2021, showed a move away from inner city purchases in the first four months of this year, with inner city apartments the key exception.

They highlighted Surry Hills in Sydney, Richmond in Victoria and Fortitude Valley in Brisbane as among the suburbs that have seen the biggest spike in first homebuyer activity.

While property prices have exploded in the first months of 2021, the data suggests it has not prevented an overwhelming number of first homebuyers from entering the property market, despite widespread reporting that skyrocketing prices are locking many buyers out.

In fact it showed first homebuyer lending across metro markets was up 13% over the first four months of the year, compared with the previous four months.

Since October last year, Australia’s property markets have been accelerating upward with seemingly no ceiling in sight, with month-on-month lending increases reaching record breaking levels, and $1 billion now flowing into the property sector every day.

Andy Kerr, executive of home ownership at NAB said the figures show that for first homebuyers soaring prices are having an impact on where they are looking — or are able — to buy.

The bank’s list of hot spots had changed significantly from December 2020, he said, with only five postcodes Australia-wide still among the fastest-growing first homebuyer markets.

Nationwide lending to first homebuyers was up 67% year-on-year, peaking in April, and up 9% compared with the final four months of 2020.

In NSW and the ACT lending is up 76% year on year, behind only Queensland and Western Australia with annual growth of 94% and 92% respectively.

The data also pinpointed where first homebuyers were gravitating, most significantly showing that lending had been more localised in 2021 compared to last year.

Victoria saw the largest spike in lending, up 26% in April on the previous four-month period and driven entirely by metro areas.

“Melbourne trailed all other cities in first homebuyer activity last year due largely to COVID-19 impacts and we have seen an element of catch-up this year,” Kerr said.

NSW and the ACT were the only regions to see a decline over the four months to April, with first homebuyer activity down 4%.

Top suburbs for first homebuyers in 2021

In terms of suburbs that have seen a spike in activity, Sydney first homebuyer hotspots include inner city suburbs like Surry Hills, which has seen lending shoot up 166% in the first four months of 2021 compared with the previous four last year.

Similarly the bank reported jumps in Lane Cove, Maroubra, and Rhodes, up 55%, 238% and 291% respectively.

Parramatta also saw strong growth and was the only postcode in Sydney that saw similarly strong lending in December 2020.

“The south-west has comparatively slowed off the significant demand we saw last year, while the strong performance of Surry Hills may be a bit of an outlier as growth in surrounding suburbs was modest,” Kerr said.

In Brisbane where the most notable change was the increase in interest in Fortitude Valley, where first homebuyers are most likely to be looking at apartments, with Broadbeach on the Gold Coast and Caloundra on the Sunshine Coast were also popular in the first months of 2021.

Outside of major cities, the data showed apartments in and around the Perth and Adelaide CBDs also appear to be drawing more first homebuyers.

In Melbourne the data showed that suburbs at the end of the train line, or with access to Mornington Peninsula, continued to draw strong demand from first homebuyers.

“This includes areas like Dandenong, Cranbourne and Frankston, which only just missed making the list and were among the top performers last year,” Kerr said.

NAB data showed over the first four months of 2021, Mount Waverley, Richmond, and Croydon saw the biggest lending increases, up 180%, 163% and 155% respectively.

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