The recent resurgence in major property markets is different from the previous boom in the big cities – this time the uplift is fundamentally about home-buyers, including first-timers.

The prolonged up-cycle in Melbourne and Sydney up to 2018 featured a strong influence from investors, but right now investor buyers are having a relatively minor impact.

Recent lending data shows some uplift in loans to investors, but the biggest growth continues to be in loans to owner-occupier buyers.

Eliza Owen of CoreLogic says the activity of owner-occupiers is creating “the fastest market recovery on record” based on the length of the downswing.

“Since national dwelling values bottomed out 8.4% below their peak at June 2019, the Australian dwelling market has quickly recovered 6.7%,” she says. “If the January growth rates continue, Australia’s dwelling market will make a full recovery by April.”

This would mean a 10-month recovery period since values found a floor in June 2019, compared to an average recovery time of 11.7 months in previous cycles.

Owen says that finance data from the ABS shows much more activity from FHBs, upgraders, and down-sizers in this recovery, compared to previous ones.

“During the previous upswing that took place from 2012-2017, the portion of housing finance to owner-occupiers averaged 59.4% based on the value of commitments,” she says. “Over the past 7 months, this has risen to 71.4%.”

One of the notable increases has been in lending for new homes. HIA economist Angela Lillicrap says there was a 5% rise in lending to owner-occupiers for the purchase of new homes in the December Quarter.

“This positive lending data is consistent with other leading indicators, including new home sales and building approvals, showing that the housing market reached a turning point mid-way through 2019,” Lillicrap says.

Across the country, lending to owner-occupiers for new dwellings increased in the December Quarter for all states and territories, except Tasmania. The ACT (up 40%) saw the largest increase, followed by South Australia (15%) and Queensland (13%).

First-home buyers are becomingly increasingly prominent. Lending to FHBs increased by 6.2% in December to record a monthly total of 9,606 loans, with the highest number of FHB loans in 10 years.

During December, the FHB share of the owner-occupier market was highest in Western Australia (43%) followed by Victoria (41%), the Northern Territory (38%) and the ACT (33%).

Master Builders chief economist Shane Garrett says: “The good news is that FHB activity has stepped up even further since the start of 2020. The new First Home Loan Deposit Scheme (which started on 1 January) is already a big success and the official figures will show more big gains for FHBs once they are released.

“Apart from FHBs, the figures show that other areas of the housing market are also recovering well. Investor loans expanded for the third consecutive month and hit a 14-month high during December.”