First home buyers make unlikely comeback in Sydney
THEY were recently on the verge of extinction but the number of Sydney first home buyers actively looking for property has surged 74 per cent in the past year due to one decisive market change.
DESPERATE first home buyers are surging back into the Sydney market thanks to favourable buying conditions and improved government grants and concessions.
The number of buyers looking to snap up their first property has skyrocketed by about 74 per cent over the past year and is at its highest level since 2009.
Price drops have provided much needed relief, with the median sale price of a Sydney home falling by 5.6 per cent in the year to September, CoreLogic’s hedonic home value index showed.
The decline, combined with falling investor sentiment thanks to tougher lending conditions and improved government handouts, allowed many first time buyers to finally get a foot on the property ladder.
Executive general manager of realestate.com.au Home Loans Andrew Russell said there was a new wave of optimism among first home buyers. “With property prices dropping … we’re starting to see more hope and confidence from first time buyers in the market,” Mr Russell said.
Economist Nerida Conisbee said the biggest factor spurring on the resurgence was the readjustment of the First Home Buyers Assistance Scheme, which provides first-time buyers a stamp duty exemption on homes under $650,000 and further concessions for purchases of up to $800,000.
“Before the first homebuyer grants were changed there were very few homes you could actually use them on,” she said.
Among the popular targets for first-timers were apartments sold off-the-plan, which traditionally sold to investors, Ms Conisbee added.
“Investors seemed like a never ending market but that trend has now reversed — it has really changed the development model,” she said.
Despite the price drops, finding a house close to the CBD to take advantage of stamp duty concessions is near impossible. Buyers will need to look in the Blacktown region 40km from the city to find properties below the $650,000 threshold, according to data from realestate.com.au.
On the other hand, units were more accessible, with suburbs like Burwood Heights and Croydon Park in the inner west, Eastlakes in the south east and West Ryde in the northern districts all within 10-15km of the CBD and with median prices that allow for full discounts.
Sophia Tomasulo and her partner Patrick Sandland, both 28, have been looking to buy their first home in the inner west for the past three months.
Currently living at home, Ms Tomasulo said declining prices were a doubled-edged sword and described the process as both “exciting and nerve wracking”.
“As prices have dropped it has meant more competition, however it is now more affordable to live closer to the city,” she said.
“We are noticing younger crowds at both auctions and inspections, usually with their parents for guidance or prams in tow.”
The Agency’s Bill Mallouhi said he had already been flooded with inquiries from first home buyers wanting to make a move this spring. “It’s a good time to enter the market as it’s much steadier than recent years,” he said.
Source: Owen Roberts Daily Telegraph 8 September 2018