The claim
With interest rates on the rise, housing affordability has cemented its place as a key election issue.
Following Labor's announcement of a shared equity housing scheme for low income earners, Housing Minister Michael Sukkar took to Sydney radio station 2GB to bolster his own party's housing schemes.
"Through the home builder programme, through the home guarantee scheme, through the first home supersaver scheme: we've got first home buyers at their highest levels for nearly 15 years," Mr Sukkar said.
So, is that correct? And how much influence has government policy had on the figures? RMIT ABC Fact Check takes a look.
The verdict
Mr Sukkar's claim is overstated.
While loans to first home buyers have not reached a 15-year high, on a number of measures, the past two years have seen such loans at a higher level than recorded since early 2010.
It's worth noting, however, that since a peak in mid-2021, the number of first home buyer loans has been decreasing (though the latest figures remain higher than those recorded in the decade to 2020).
As for the impact of government policies, experts told Fact Check that Coalition schemes had indeed resulted in more first home buyers, though they noted the increase was unlikely to be sustained in the long term.
One expert spoke of a "very strong expectation" there would be a dearth of first home buyer activity in coming years as a result of demand being brought forward by government policies.
The numbers
The Australian Bureau of Statistics publishes monthly data on the number of new loan commitments made to first home buyers, both owner-occupiers and investors.
At the time of Mr Sukkar's claim, May 2, the latest available data was for February of this year, though March figures have since been released.
While Mr Sukkar did not specify whether he was referring to owner-occupiers or all first home buyers in his claim, the ABS only publishes data predating 2019 on owner-occupier first home buyers.
In an email, a spokesman for Mr Sukkar told Fact Check that according to ABS data, the highest number of first home buyers since data became available in 2004 was recorded in the 2020-21 financial year.
The spokesman provided a table of figures that can be derived from the ABS monthly data.
However, as Fact Check explains below, using figures for the year to June does not tell the full story.
Fact Check has used the bureau's seasonally adjusted data and analysed it in three ways: on rolling annual figures; on monthly figures; and on annual figures in proportion to the adult population.
On the rolling annual figures, Mr Sukkar is close to the mark.
As the chart below shows, after rising to 175,318 in the year to November 2009, the number of loans to first home buyers fell and remained at a consistent level — between approximately 80,000 and 106,000 loans per year — for almost a decade, before beginning to rise again in late 2019.
That increase led to a recent peak in the year to July 2021, when there were 173,383 loans made to first home buyers.
Indeed, the annual rolling figures of first home buyer loans recorded since the year to August 2020 have all been higher than those recorded at any point since the year to July 2010.
However, this rolling annual total measure also shows first home buyer loans have been in decline consistently since their July 2021 peak.
This decrease can be seen more clearly in the monthly figures, which show that the number of loans to first home owners has been falling sharply since January 2021, when 16,257 loans were recorded.
Just under 10,000 new loans were made to first home owners in February 2022, a similar number to June 2020.
The month with the most loans given to first home buyers in the past 15 years occurred in April 2009, when 16,753 new loans were made to first home owners.
What about population changes?
Adjusting the annual figures for population change, as depicted in the graph below, shows the recent peak compares less favourably to that which was recorded in late 2009.
Fact Check has used the bureau's figures for the estimated resident population aged 18 and over, which are available for each year to June. The number has grown from 15.4 million in June 2005 to 20.1 million in June 2021.
Similar to the nominal figures, the adjusted figures for the year to June 2021, which is the last full year for which population estimates are available, remain the highest for about 12 years.
Contrary to the email from Mr Sukkar's spokesman, when adjusted for population the number of loans made in the year to June 2021 was not the highest made in any financial year since 2004.
On the population-adjusted figures, more loans were made to first home buyers in the year to June 2009.
The government policies
In making his claim, Mr Sukkar attributed an increase in first home buyers to a number of government policies.
The first, the HomeBuilder program, was a temporary measure announced in 2021 to support the construction industry through the COVID-19 pandemic. Eligible applicants could receive up to $25,000 towards the cost of building a new home.
Mr Sukkar also referred to a home guarantee scheme.
In the New Home Guarantee Scheme the National Housing Finance and Investment Corporation guarantees loans for first home buyers, allowing them to purchase a new home with as little as a 5 per cent deposit.
This scheme is limited to newly built properties, house and land packages, off-the-plan dwellings and land with a contract to build a home.
A separate scheme, the First Home Loan Deposit Scheme, opens the loans to those buying existing dwellings.
Finally, Mr Sukkar referred to the First Home Super Savers Scheme, a program through which first home buyers can make concessional contributions to their superannuation which can then be withdrawn in order to purchase a home.
It is worth noting that the previous peak in loans to first home buyers occurred after the Rudd government introduced a First Home Owners Boost scheme.
So, how much of an impact have the policies had?
According to Brendan Coates, the economic policy program director at the Grattan Institute, it was "really hard" to measure how much impact government policies had on the number of people buying their first homes.
"But I think there's no doubt that HomeBuilder and the home loan guarantee schemes have added to home ownership rates in the short term," he said.
Other factors influencing first home ownership levels, Mr Coates explained, were falling investor activity over recent years as well as low interest rates, though it was "hard to be precise about the relative size of these effects".
Hal Pawson, a professor of housing research and policy at the University of New South Wales, agreed.
"I think the Minister's claim is not an over-statement of the impact of Coalition policy measures in 2020 and 2021," he told Fact Check, noting that low interest rates had also played a role.
Kate Raynor, a research fellow at the University of Melbourne with expertise in housing policy, concurred that "a big part of the increase in first home buyers is a reflection of government policy".
"Especially as the home guarantee scheme is only targeted at first home buyers and because a high proportion of the 137,000 who accessed HomeBuilder were first home buyers," Dr Raynor explained.
"Another big factor driving first home buyers was low interest rates and increased savings for some due to COVID lock downs and FOMO as prices increased so rapidly."
She noted, however, that she believed the HomeBuilder scheme was a "terrible policy intervention".
Are the policies sustainable?
All three experts told Fact Check that while government policies had driven an increase in the number of first home buyers in recent years, it was unlikely this growth would be sustained.
"One of the things you do when you introduce these kinds of schemes, particularly HomeBuilder which is time-limited, is you bring forward a whole bunch of demand," Mr Coates said.
"You bring forward a bunch of people that are getting ready to buy anyway."
This had happened in the past, he explained, when first home owners grants and stamp duty concessions saw a spike in first time buyers followed by a lull when the schemes were no longer available.
According to Professor Pawson, there was a "very strong expectation" there would be a dearth of first home buyer activity in coming years as a result of demand being brought forward by government policies.
"This prediction is informed by the observation of what took place in the period 2008-12, when the Rudd Government introduced a time-limited first home buyer grant program similar to HomeBuilder," he explained, noting that such initiatives "simply encourage people to advance existing plans to make their first home acquisition".
"They cannot be credited with any significant impact in terms of enabling first home ownership for people otherwise permanently excluded."
Principal researcher: Ellen McCutchan
Sources
- Michael Sukkar, Ray Hadley Morning Show, 2GB, May 2, 2022
- Australian Bureau of Statistics, Lending Indicators, February 2022, April 1, 2022
- Australian Bureau of Statistics, National, state and territory population, September 2021, March 17, 2022
- Australian Treasury, HomeBuilder fact sheet, April 27, 2021
- National Housing Finance and Investment Corporation, New Home Guarantee fact sheet, July 1, 2021
- National Housing Finance and Investment Corporation, First Home Loan Deposit Scheme fact sheet, July 1, 2021
- Australian Taxation Office, First Home Super Saver Scheme, February 23, 2022
