Incentives will be tempting for newcomers

Susan Wellings

September 24, 2011

The race is on to make the most of concessions on stamp-duty.

With most house prices fairly steady, interest rates stable and wages rising, onlookers believe first-home buyers are finally gearing up to enter the property market over the next few months.

Many will be planning to buy established properties before the end of stamp-duty concessions on December 31, while others are starting to take a keen interest in new offerings as a way of cashing in on those concessions that will continue into next year.

''I really think the market is at a bit of a turning point,'' says the joint managing director of research and investment group Rismark International, Chris Joye. ''Affordability is improving for first-home buyers and there has been a corresponding rise in activity.''

At the cheaper end of the market, in the classic first-home buyer areas of south-west and western Sydney, there has been a sharp rise in demand in the weeks since the budget, says Ken Adams of property valuers WBP Property Group.

''The only restriction seems to be the availability of stock.''

That could signal the end of the long drought in which first-home buyer numbers slumped to below pre-global financial crisis levels since the end of the First Home Owner Boost at the start of last year.

First-timers currently comprise just 14.3 per cent of the market, down from 17 per cent to 18 per cent before the GFC and well down on up to 25 per cent during the boost times, says Housing Industry Association economist Harley Dale.

''The incentives to buy new homes do have the potential to entice some first-home buyers who might otherwise have bought existing property to buy a new home instead, which will help the construction industry and the economy generally,'' Dale says.

''But it's still to be seen whether it will mean an overall boost in the number of buyers.''

Many first-home buyers looking for apartments still have the eastern suburbs and the inner west at the top of their wish-lists for properties below $600,000.

''But there's not much stock around at the moment in that price range,'' says Belle Property's Scott Aggett.

''As a result, some are going to the inner west - to Glebe, Annandale and Balmain - or further out in the east, like Matraville. But others have their heart set on places like Potts Point and Elizabeth Bay and are hanging out for a place there.''

In the inner west, Planet Properties principal Rosalie Gordon says she's expecting a sharp increase in buyers looking over the next two months.

''We have a lot of people currently renting in the inner west looking to buy here,'' she says.

''And they're now being joined by people from everywhere else to look here, too.''

Those looking for houses are having to move further west, south-west or south to find properties in the sub-$600,000 range, for which stamp-duty concessions for established properties will still kick in until the end of the year.

''We're expecting a rise in activity over the next couple of weeks,'' says Bernadette Berlyn of McGrath Cronulla. ''We also have a new development in Sutherland, with homes under $500,000 that will attract first-home buyers.''

In the western suburbs, the rush is already happening.

''We're getting a lot of first-home buyers looking out here now,'' says Krysztof Nowak of LJ Hooker Merrylands. ''For $500,000 or $600,000, you can still get a three- or four-bedroom house on a block of land in parts of the west,'' he says.

Susan Wellings

September 24, 2011

Sydney Morning Herald