Government incentives, low interest rates and current market conditions have seen an influx of first-home buyers get their start on the property ladder, and it’s a trend set to continue into 2021.
A national Westpac survey revealed that COVID-19 motivated 42 per cent of young Aussies to save for their first home, a sentiment that’s increased by 22 per cent since May.
Westpac’s managing director of mortgages Anthony Hughes said there was a definite increase in first-home buyer activity in 2020, as the pandemic encouraged people to “engage with their finances on a deeper level” and “take advantage of record-low interest rates”.
There are, however, set factors influencing where first-home owners are targeting.
Affordability and government grant limitations were the two key considerations, with location, space and select amenities also influencing buyers. As a result these were the biggest first-home buyer suburbs of 2020, with market interest in these areas only expected to strengthen.
For first homeowners in New South Wales, suburbs in Western Sydney and Sydney’s rapidly growing southwest area are drawing increasing interest. According to search trends and data from realestate.com.au, key target areas included Schofields, Box Hill, Marsden Park, Leppington, Edmondson Park and Gregory Hills.
Features luring first-home buyers included suburbs abundant in new housing estates and unit projects, where the bulk of homes were priced under $1 million. This meant buyers were eligible for government first-homebuyer incentives like stamp duty exemptions and HomeBuilder. Space was also held at a premium, especially homes which came with backyards.
Taking advantage of government incentives were top of mind for Victorian first homebuyers. Apart from Commonwealth HomeBuilder grants and the First Home Loan Deposit Scheme, Victorian buyers can still access $0 stamp duty on homes worth up to $600,000, with concessions available on properties between $600,000 and $750,000. A $10,000 metro Melbourne First Home Owners Grant or $20,000 regional First Home Owner Grant is also available for eligible buyers.
As expected, this meant first-home buyer activity was most popular in suburbs with a median house or unit price under $750,000.
A range of factors – from a reduction in investor activity to declining home prices – have seen more young buyers enter the property market. However it’s not just Queenslanders taking advantage of prime conditions in the Sunshine State. Managing Director for the Springfield City Group, Raynuha Sinnathamby – who looks after one of Australia’s biggest masterplanned cities – noted that 10 per cent of buyers were from interstate.
“They are coming from not just Victoria and New South Wales, but the Northern Territory and WA as well,” he said.
Other buyer hotspots included Coomera, Pimpama, Redbank Plains and North Lakes for houses and Surfers Paradise and Southport for units.
Government support also saw young buyers consider houses over units. Realestate.com.au’s chief economist Nerida Conisbee credited this to HomeBuilder initiatives which greatly impacted the new home and house and land package sector.
“As a result, we saw a lot of first home buyers looking at new home locations,” she said, speaking to the Courier Mail. “They’ve become more dominant than they were before.”
Low interest rates, affordable choices and government incentives were three key factors which incentivised the South Australian property market for first-time buyers. Location, however, was the top priority for homeowners to be. The continued dominance of remote working meant affordable areas in the southern suburbs drew a lot of interest thanks to their proximity to the beach and the city.
Speaking to The Advertiser, Ray White South Australia chief executive Matt Lindblom said that unlike other capital cities, Adelaide is filled with “affordable” options which cater to a range of preferences.
“You can buy a really nice home with everything done that’s a bit further out, or you can buy a home that needs a bit of work in the western suburbs, but it’s a really good location,” Mr Lindblom said.
This article was created in partnership with Westpac