First home buyer loan approvals have increased strongly over the last two years with 115,000 approved in the last financial year alone – the largest number since 2009-10.
This has seen first home buyers share of new residential lending rise from 13.7 per cent in October 2016 to 18.1 per cent in October 2018 to be at its highest level in six years.
During the Rudd-Gillard years new lending to first home buyers fell from 19.1 per cent at the end of the Howard Government to 16.3 per cent as the youth unemployment rate surged by nearly 3 percentage points.
The recent improvement in first home buyer activity is driven by a number of factors including the Liberal National Government's plan for a stronger economy and the creation of over 1.2 million jobs.
Employment is the foundation for buying a first home and with more than 100,000 young Australians getting a job last financial year, the highest number on record, the future looks bright.
Over the last year Coalition Government initiatives have also played an important role in supporting people realise their dream of owning a home.
The Government has successfully implemented a number of measures announced in the Reducing Pressure on Housing Affordability 2017-18 budget package. This includes initiatives such as the Government's First Home Super Saver Scheme and incentives for older Australians to downsize and put proceeds of sale into their super.
Targeted and short term interventions from the Australia Prudential Regulation Authority (APRA) have also helped change the housing dynamic from one of investor led growth to owner-occupied led growth. These policies have, according to the RBA, 'increased the resilience of the economy to future shocks'.
Now that APRA's interventions have been wound back it is vitally important that the banks continue to provide affordable and timely access to credit particularly as housing credit from banks has fallen to 4.4 per cent compared to its 10 year average of 8.1 per cent.
The banks keeping open their loan books to borrowers will help maintain the strength of the Australian economy.
This is not the time for Labor's disastrous new housing taxes which independent experts declare will damage market confidence and weaken investor demand.
The major credit rating agencies have warned of the negative consequences to the broader economy from a sharp fall in house prices which could stem from a larger pullback in investor demand putting at risk our AAA credit rating.
As Treasurer, new ALP President Wayne Swan labelled changes to negative gearing as "economically disastrous". It is as true now as it was then.
Under a Bill Shorten led Labor Government, if you own your own home, it will be worth less and if you rent your home, you will pay more.