A RISE in the number loans to first home buyers to the highest levels in 18 years, driven by low interest rates and generous government grants, supports an ongoing recovery in the housing sector, economists say. First home buyers represented 26.5 per cent of all loans written for owner-occupied housing in January, an improvement from 25.7 per cent in December. It was the largest proportion recorded since the start of the data series in 1991 and the third consecutive monthly rise, Australian Bureau of Statistics figures show. Overall, the number of new loans for owner-occupied housing increased by 3.5 per cent in January, ABS figures showed. It was the fourth straight monthly rise. Westpac senior economist Andrew Hanlan said households had clearly responded to lower interest rates and the boost to the first home owners grant. “Moreover, the housing finance recovery has gathered pace and broadened in its scope,” Mr Hanlan said. “Upgraders are now responding.” Mr Hanlan said demand for housing finance was expected to rise further in coming months, given the stimulus already in the system.

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