Talk of doom and gloom in the property market is making one group of buyers particularly cheerful.
While investors and upgraders have all seen a drop in finance approvals, first home buyers have bucked the trend. We are now seeing the highest level of first home buyers since 2010.
What is driving this, can it continue and what are some of the top suburbs for first home buyers?
Source: Australian Bureau of Statistics
Improved first home buyer grants
Although there is often criticism that first home buyer grants lead to higher prices, there is no doubt that they help more people get their foot on the property ladder.
First home buyer grants have been revamped in many states and NSW has seen the most dramatic rise, with uptake increasing by over 70% over the past 12 months.
Source: Australian Bureau of Statistics
Fewer investors
The majority of investors and first home buyers have similar search behaviour: they target similar price points, property types and suburbs.
With fewer investors now in the game, it is easier for first home buyers to get into the market, whether they are buying a brand new or existing property.
Slowing price growth
Prices have now declined in both Sydney and Melbourne and at this stage look like they may fall some more.
This has helped many first home buyers in a number of ways.
Properties are cheaper, so people looking to enter the market can find more properties that fit within their budget.
The slowdown is also giving people more time to make an informed decision about where to buy that's right for them and their lifestyle.
Can it last?
One criticism of first home buyer grants is that they pull forward demand.
First home buyers who may have otherwise bought next year will instead make the decision to buy now. This trend was clearly seen in 2011 after the jump in first home buyer activity in 2010.
Whether we will continue to see strong activity from first home buyers going forward will greatly depend on whether the grants are reduced or changed significantly.
Other impacts to consider are any increases in interest rates, or greater difficulty in getting finance.
For now, we can expect first home buyers to be active for the remainder of the year.
Article Source: Nerida Conisbee, https://www.realestate.com.au/news/first-home-buyers-are-the-cheeriest-of-them-all/www.realestate.com.au/news/first-home-buyers-are-the-cheeriest-of-them-all/