NAB, the second-largest bank in Australia, has disclosed that first-home buyers’ confidence in builders has reached a six-year low due to the impact of the construction industry collapses in Victoria. 

NAB’s Residential Property Index showed some improvement in Q1 2023, but remains weak due to falling house prices. First home buyers have significantly reduced their presence in new housing markets, while foreign buyers are making a comeback, particularly in NSW. NAB predicts a minor decline in property prices in the near future, with prices expected to rise in 2024 as rates fall. Despite the continued impact of rates, strong population growth, a tight rental market, and a healthy labour market are expected to counterbalance the effects.

Victoria’s construction industry collapses have caused first-home buyer confidence in builders to plummet to a six-year low, as revealed by a report from Australia’s second-largest bank. The report also highlights that first-time buyers now only account for 35.7% of the new home market, compared to 60% during the pandemic. The NAB Quarterly Residential Property Survey also indicates that renters in Victoria are facing a 4.5% increase in housing costs. A buyer’s advocate who works with first-home buyers has warned that Melbourne’s challenging rental market is unlikely to improve anytime soon due to current “unprecedented rates of migration.”

Foreign buyers showed the most interest in NSW, with numbers increasing to 16.2%, the highest level in eight years. Western Australia also experienced an above-average increase to 7.9%, while Queensland saw a modest rise to 7.5%. However, Victoria’s market share of foreign investors fell to a two-year low of 4%. Additionally, the report revealed an increase in foreign buyers’ market share in established housing markets, rising from 2.8% in Q4 2022 to 3.8%.

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