The head of one of the Big 4 banks says low interest rates have created an unusual situation for people facing an age-old property conundrum. National Australia Bank says it’s now cheaper to buy a home rather than to rent.

NAB chief executive Ross McEwan says 16% of lending is coming from first-home buyers capitalising on government schemes to gain access to the property market, with demand for FHB loans at its highest in more than a decade.

“There are more first-home buyers getting into this market than we’ve seen probably in the last 10 years,” McEwan says. “First-home buyers are finding it cheaper to buy than it is to rent.” McEwan also notes that prices outside of major metro areas have grown faster, as more people continue to flock there from inner-city areas.

The exodus from metro areas has been in part due to the shift to work-from-home arrangements sparked by improved technology and exacerbated by the pandemic.

“We are seeing a big trend of people moving out of the city, and house prices out of the main centres are going up much higher than those in the inner city,” he says.