First home buyers are shifting from regional to metropolitan areas, particularly in NSW and Victoria, according to the latest data from NAB.

From May to August 2021, NAB's first home buyer lending surged 77% compared to the same time last year. 

It also spiked by 20% compared to the first four months of this year.

This is following first home buyers reportedly dropping off in all states except for ACT according to research from Bluestone.

Regional first home buyers are up 88% year-on-year, while being up 85% for metropolitan areas, but this has started to shift in the past four months.

First home buyer activity in metropolitan areas is up by 24%, compared to 16% regionally, pointing to a shift in first home buyers opting for city living in some states according to NAB.

NAB Executive Home Ownership, Andy Kerr, said first home buyers are finding bargains across Sydney and Melbourne despite the 'increasing challenge' of rising prices.

"Lockdowns across Sydney and Melbourne have had an impact but we anticipate seasonality to return when we usually see a lot more stock come onto the marketplace during spring," Mr Kerr said.

"We are optimistic that as NSW and Victoria continue to open up in coming weeks as vaccination rates increase, listings particularly in Melbourne will surge towards the end of 2021."

Mr Kerr attributes the 'big shift' of Aussies working from home to the spike in buyers looking to live in suburbs not available in the past due to the daily work commute.

"The correlation between outer-metro suburbs and buying new builds in particular is certainly playing through in finding a bargain," he said.

"Inner-city apartments are again drawing more attention as buyers eye areas where price growth is more subdued."

He said that with the latest release of the First Home Loan Deposit Scheme, first home buyer activity has seen continued momentum since July.

In particular, NSW, Queensland, and WA are 'leading the way' with first home buyer lending, accounting for 90% of first home buyers over the past year.

Melbourne has trailed all other cities for first home buyer activity, largely due to lockdowns, with an element of 'catch-up' expected to play out this year.

When compared to the first four months of this year, NSW and ACT are the 'frontrunners' with first home buyer activity up 29%, particularly in metropolitan areas.

"First-time buyers appear to be responding to price changes as our list of hotspots has changed significantly from June, with only five postcodes Australia-wide on both lists," Mr Kerr said.

"While activity has slowed in regional areas in QLD and WA from the first few months of this year, in NSW and Victoria it’s clear the sea and tree change continue to be incredibly popular for first-time buyers."

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LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees Max LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkComparePromoted ProductDisclosure
6.04% p.a.
6.06% p.a.
$3,011
Principal & Interest
Variable
$0
$530
90%
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5.99% p.a.
5.90% p.a.
$2,995
Principal & Interest
Variable
$0
$0
80%
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6.09% p.a.
6.11% p.a.
$3,027
Principal & Interest
Variable
$0
$250
60%
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5.69% p.a.
6.16% p.a.
$2,899
Principal & Interest
Fixed
$0
$530
90%
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Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

Important Information and Comparison Rate Warning

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