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Twice as many first-home buyers are looking to enter the market since before the COVID-19 pandemic, exclusive new research reveals.
Low interest rates, high rents and government incentives have sparked the buying frenzy, according to a survey commissioned by Westpac and conducted by Lonergan Research.
The surge, from 7 per cent to 16 per cent since the start of the pandemic, is also being driven by those fed up with sharing a roof with housemates or parents, and those seeking stability or a better lifestyle after the uncertainty brought about the coronavirus.
Nearly half of first-home buyers surveyed said they were more optimistic about entering the housing market than they were 12 months ago, due to factors such as house prices (38 per cent) and the opportunity to live in a new area (24 per cent).
Beyond financial reasons, the findings suggest time spent with others during restrictions has motivated many, with seven in ten of those sharing with housemates, parents or in-laws determined to get a foot on the ladder.
The findings also revealed where first-home buyers in Brisbane and southeast Queensland are looking to buy.
It shows they favour houses in suburbs located between 10 to 20 kilometres from Brisbane’s CBD, including Redbank Plains and Rochedale South, while Surfers Paradise and Southport on the Gold Coast are the choice for units.
The latest Bureau of Statistics figures show that more than 13,000 first-home buyer loans were approved nationally in September — 45.5 per cent more than the same month a year ago.
Westpac managing director of mortgages Anthony Hughes said the bank had seen a strong increase in first home buyer applications, with Queenslanders among the highest number.
“Our research shows young Australians are now seeking the independence that comes with owning a home, which has been amplified by the fact they’ve had to spend this time cooped up with housemates or parents,” Mr Hughes said.
“Many are taking stock of their finances for the first time as well. In a low-interest-rate environment, for example, the cost of rent in some instances is now more aligned with estimated home loan repayments.
“So the prospect of buying a home no longer feels like such a pipe dream.”
Mr Hughes said the silver lining of the pandemic was the positive impact it had on savings, with many young people pocketing what they would have otherwise spent going out, travelling or on gym memberships.
The research also shows Queensland first home buyers are more determined than those in any other state to gain a sense of independence through home ownership, with prospective buyers most likely to not want to pay rent anymore and to seek financial security.
Realestate.com.au chief economist Nerida Conisbee said first-home buyer activity had accelerated since COVID-19, with federal and state government incentives encouraging this buying group into the market.
“HomeBuilder switched a lot of people who were looking at units to houses, and as a result, we saw a lot of first-home buyers looking at new home locations, so they’ve become more dominant than they were before,” Ms Conisbee said.
“It’s definitely having a big impact on the new home sector and house and land.”
Lower interest rates, relaxed lending restrictions, declining house prices — particularly units — and the desire for more space and a better lifestyle was also driving activity, she said.
But Ms Conisbee said one of the other factors could be the lack of competition from investors.
“They seem to be picking up a lot of the apartments that were built with investors in mind,” she said.
“A lot of renters could be also changing to buyers because it’s as cheap to buy as it is to rent in some places.”
New research on the Queensland land market from Oliver Hume reveals residential land sales set a new record in the September quarter, with nearly 2500 lots sold.
The Logan region recorded 720 sales over the quarter — up a whopping 51 per cent compared to the previous quarter.
“Buyers can be partly attributed to the attention that the (HomeBuilder) grant brought to the new residential land market,” the report said.
“Purchasers that traditionally would not have considered new home and land packages have been drawn to the market via the grant and become acquainted with the market’s relative affordability and other benefits.
“A range of other factors, including continued low interest rates and the flexible working arrangements, has made proximity to the CBD and inner city a less important issue compared to a year ago.”
Couple Tammy Eiser, 29, and Dean Rawding, 31, have just bought their first home in Tarragindi — a popular suburb in Brisbane’s southeast.
They had been boarding with Miss Eiser’s sister and her two children for the past three years and are happy to have a place to call their own.
But Miss Eiser said the couple had been looking since the start of the year and had missed out on getting a number of properties because of the lack of stock and buyer demand.
“They kept saying because of COVID ‘the market’s going to drop’, ‘the market’s going to drop’, but people were still putting in offers well above the asking price,” Miss Eiser said.
“As a first-home buyer, you’re very uncertain about the process and how to get into the market; it’s quite daunting.
“Dean and I were also very picky. Tarragindi was our long-term goal. We thought maybe we’d buy somewhere around there.”
The couple, who are getting married next year, managed to buy a two-bedroom, one-bathroom house in their suburb of choice.
“It’s only about 90 sqm but I’m an engineer and Dean’s a carpenter so with our skills, the plan is to add value to the house,” she said.
“It’s a great suburb. We definitely bought for the location in the end and, hopefully, can add value.”
Buyer’s agent Jillian Breen of Lauren Moore Property, who helped the couple find their first home, said she had been dealing more first-home buyers since COVID-19 — many who had been living in units and were “desperate for their own home and space”.
But Mrs Breen said she warned her clients that it was not a market to be “bagging a bargain”.
“I think people are confident and moving forward because of the low interest rates, but they’re feeling overwhelmed because of the lack of stock,” Mrs Breen said.
“They’re making offers but they’re missing out because nine other people are making offers at the same time.”
SOUTHEAST QLD’S MOST IN-DEMAND FIRST-HOME BUYER SUBURBS
Suburb Location Property type
Surfers Paradise Gold Coast Unit
Redbank Plains Brisbane House
Rochedale South Brisbane House
Caboolture Brisbane House
Brisbane City Brisbane Unit
North Lakes Brisbane House
Southport Gold Coast Unit
Capalaba Brisbane House
Kallangur Brisbane House
Morningside Brisbane Unit
Coorparoo Brisbane Unit
Nundah Brisbane Unit
(Source: Realestate.com.au. The data is based on total number of email inquiries to an agent by people who identified themselves as a first home buyer on realestate.com.au during the month of October 2020)