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First-home buyers are driving the Melbourne market’s recovery from pandemic pain, with new research finding COVID-19 has created conditions and motivation for many young people to get onto the property ladder.

Compared to pre-pandemic levels, twice as many Aussies are now planning to buy their first home, a Westpac survey shared exclusively with the Herald Sun reveals.

And reports from NAB and ANZ this week showed many were already putting purchasing plans in motion, with the former stating “first-home buyer levels rose to new highs in both new and established housing” in the last quarter.

The Westpac survey of 2088 Australians found not wanting to pay rent forever was the biggest motivator among budding Victorian buyers, followed closely by wanting a sense of stability and financial security.

The state’s respondents were driven by cooling house prices (22 per cent) and low interest rates (19 per cent).

Three in five stated the lockdowns had made them question where they wanted to live, while almost half reported being more optimistic about entering the market than they were a year ago.

Westpac managing director of mortgages Anthony Hughes said Victorians had been “the most influenced by COVID-19 to rethink their homeownership goals”, with their desire for housing independence “amplified” by being “cooped up with housemates or parents”.

“As challenging as the pandemic has been, the silver lining is many have seen a positive impact on their savings by pocketing what they would’ve otherwise spent going out, or on items like gym memberships or travel,” Mr Hughes said.

“This is especially so for those in Melbourne.”

The Westpac survey revealed a keenness to live further from Melbourne’s CBD, identifying

eastern suburbs 20-40km out, like Mitcham and Croydon, as hot spots.

Further realestate.com.au data named outer suburbs Point Cook, Pakenham, Craigieburn and Frankston as the most in-demand house markets for first-home buyers.

Realestate.com.au chief economist Nerida Conisbee said these areas were attractive for their affordability, while the top three had also been “helped along” by the federal government’s $25,000 HomeBuilder grant.

The St Kilda, CBD, Preston and Reservoir unit markets were also popular with first-timers.

Ms Conisbee said first-home buyer activity had accelerated as a result of COVID-19, boosted by government incentives like HomeBuilder and the First Home Loan Deposit Scheme, falling interest rates and home prices, the desire for more space and a better lifestyle, and reduced competition from investors.

This is confirmed by ANZ figures showing the value of first-home buyer loans had shot up 47 per cent nationwide — the highest level since a “post-GFC rush” in 2009 — and 20.6 per cent in Victoria in the year to September.

A report by ANZ economists Felicity Emmett and Adelaide Timbrell this week said: “Owner-occupiers, and particularly first-home buyers, are driving the market”.

Westpac reported an 18 per cent increase in new lending to first-home buyers nationwide from April to September, compared to the same period last year.

NAB’s latest Residential Property Survey reported the share of first-time owner-occupiers had increased to a dominant 35.1 per cent in Victoria’s established housing market, while the buying group also remained the most active participants in the nation’s new housing sector.

East Melbourne tenant Bridget Lorusso is planning to fulfil her dream of buying her first home next year, with partner Matt Anderson.

The 24-year-old graphic designer said the pandemic had made it easier for her to stick to her “tight budget” by removing the ability to go out for meals and the need to buy new clothes.

“I’ve always wanted my own space and now I’m renting, I’m finding it’s kind of a waste of money,” she said. “I could buy something and my mortgage repayments will probably be cheaper.”

FIRST-HOME BUYER HOT SPOTS

Point Cook (house)

Pakenham (house)

Craigieburn (house)

Frankston (house)

St Kilda (unit)

Melbourne CBD (unit)

Preston (unit)

Reservoir (unit)

Werribee (house)

Tarneit (house)

Source: realestate.com.au, based on total number of email inquiries to an agent by people who identified themselves as first-home buyers in October