First-home buyers have a spring in their step in Melbourne property market
FIRST-home buyers are tipped to be a force in Melbourne’s spring property market, with conditions more favourable than they were last year.
The number of loans to first-home buyers in Victoria increased 10.3 per cent over the June quarter — an annual increase of 35.5 per cent, Adelaide Bank’s latest Housing Affordability Report shows.
Geelong, its suburb of Norlane, Heidelberg West, Wyndham Vale and St Albans have been flagged by experts as value areas for first-timers looking to enter the market this season.
CoreLogic Victorian director Geoff White said stamp duty concessions introduced last year came in at a time when the market was “very strong”.
These included exemptions for first-home purchases up to $600,000 and reductions on a sliding scale up to $750,000.
“Clearance rates were higher, competition was higher, whereas now the market’s softened, clearance rates are down and it’s more of a buyers’ market than it was last year,” he said.
“First-home buyers particularly could bid or buy property at the moment knowing they’re not buying at the peak of the market, which they potentially would have been doing late last year.”
The investor market had also “definitely tightened up” amid tougher lending conditions, which could also mean less competition for homebuyers, Mr White added.
The Australian Prudential Regulation Authority has made moves to restrict interest-only loans and banks have tightened their lending practices amid the Royal Commission into the sector.
Real Estate Institute of Victoria president Richard Simpson said first-home buyers now represented 19.6 per cent of the state’s residential purchasers.
“The Victorian Government’s introduction of incentives has spurred a five per cent increase in the number of first-home buyers getting into the market comparing June 2017 with June 2018.”
He said the REIV’s top three hot spots for first-home buyers in spring were Wyndham Vale, Melbourne’s St Albans and Geelong’s Norlane.
Realestate.com.au executive general manager, home loans, Andrew Russell said there was more hope among first-home buyers across the country amid cooling conditions.
“To ensure you can bid with confidence, a good tip is to get conditionally approved in advance before going to auction,” he advised.