First home buyer activity strengthens.

If the number of loans to first home buyers is anything to go by, then it would seem that the overall housing market has witnessed an increase in activity.

HIA senior economist Shane Garrett said the share of first home buyers in the total owner-occupier housing loans increased again during June, hitting a six-year high.

Citing figures from the statistics bureau, Garrett said first home buyer made up 18.1% of owner-occupier home loans during the month.

Over the past twelve months to June, the volume of first home buyer occupier lending has risen by 11.4%.

"There are a few reasons behind this welcome trend. Several state governments, including NSW and Victoria, have enhanced their incentives giving the first home buyer segment a new lease of life," Garrett said.

Garrett added that the slowing house prices and the low-interest rate level have worked in favour of these first-timers. Additionally, the shrinking of investor activity has encouraged prospective buyers to enter the market – in June, the value of housing investor loans hit a five-year low, declining by 22.4% since its recent high last year.

“Investment participation in the housing market plays a key role in delivering new housing supply and is vital to the healthy functioning of rental markets right around Australia," he said.

Garret added, "Recent policy and regulatory changes have made it more difficult for investors to participate in the housing market. With our population hitting 25 million, any obstacles to housing supply must be avoided so that the industry can meet our future housing needs"