As soon as the expanded Home Guarantee Scheme was announced a month ago, a frenzy of buyer activity hit markets around the country, according to the Real Estate Buyers Agents Association of Australia (REBAA).
The Federal Government scheme – which starts on Wednesday – removes place and income limits and raises property price caps, enabling more first home buyers to enter the market with a five per cent deposit as well as no Lenders Mortgage Insurance.
REBAA President Melinda Jennison said prices had jumped significantly in many locations over the past month as homebuyers started to panic about the impact of the scheme on the wider market.
“Properties that were selling for $750,000 last month are now selling for close to $800,000,” Ms Jennison said.
“Many buyers are reportedly panicking with some purchasing sight unseen or overpaying to secure a property before 1 October.”
Ms Jennison said while it was admirable the Federal Government was helping more first home buyers into the market by underwriting deposits, without additional housing supply, the end result was already pre-determined.
“What was $800,000 will soon be $900,000, which will make it even more difficult for first timers to secure finance for a home – even with the scheme’s five per cent deposit on offer,” she said.
“Markets are already in frenzy, let alone what the next few months will bring once the scheme has started.”
“Property buyers need to calm down, stick to their budgets, and seek out expert advice from professional buyers’ agents to ensure they don’t overpay because of their fear of missing out.”
State by state commentary
REBAA New South Wales State Representative Linda Johnson said it is the first time since interest rates were increased that there have been queues at inspections and negotiations commencing after the first Saturday, with properties hotly contested and selling over the weekend.
“The onset of this competition has driven prices to set new records in some areas and shortened days on market,” she said.
“We have seen an increase in both investors and first home buyers looking for entry-level family homes, as close to major centres as possible, with capital growth and getting into particular hotspots before it’s too late being the main focus.
“In some markets, there has also been a flurry of new listings at the lower end. An element of FOMO and panic is in the air, with emotions running high. We expect this to heighten further from 1 October.”
REBAA Victoria State Representative Matt Scafidi said first home buyers had been noticeably more active in the past month.
“Demand has lifted for properties under $900,000 – especially two-bedroom units and townhouses in the inner- and middle- rings – as buyers position themselves ahead of the October expansion,” he said.
“We’re seeing faster pre-approval activity, stronger auction participation, and a lift in competition that’s nudging up price guides late in campaigns.”
REBAA Queensland State Representative Melinda Granzien said there had been a noticeable lift in demand on the ground as well as direct enquiry from first home buyers, particularly in the $650,000 to $800,000 price bracket.
“Demand at inspections has been strong, with increased buyer attention at open homes and multiple offer situations becoming the norm,” she said.
“First home buyers are proving competitive against investors, particularly given the low stock levels and limited quality of available properties.
“Medium- to high-quality properties are moving fast, with many going under contract within a day of listing and, in some cases, buyers are submitting offers sight unseen in order to secure a property quickly or overpaying.”
REBAA Western Australia State Representative Peter Gavalas said listings had dropped 25% since the start of the financial year, putting upward pressure on prices. “There has also been a remarkable shift in first home buyers in the market, especially in the under $750,000 budget in the inner-city suburbs,” he said.
“Buyers in this space have been a lot more active trying to get in before further prices rises and the government’s deposit scheme starts. It’s not unusual to see 10 to 20 offers on some of these properties.
“The expectation is we will see more activity in the market below $850,000 after 1 October, but we also expect to see more properties come to market at this time trying to capture this market.”
REBAA South Australia State Representative Jess Elam said first home buyers had not only been more active in Adelaide but were also more confident.
“In the last few weeks, homes in the $600,000 to $800,000 price bracket have been attracting stronger competition, particularly in southern suburbs such as Seaford and Aldinga Beach,” she said.
“One of the key immediate effects will be greater demand in suburbs that were previously just out of reach. With the new changes, I expect that fringe and inner-ring areas, especially in the northern and southern suburbs, will see increased interest.
“The recent lift in eligibility has the potential to almost double the number of suburbs available to first home buyers. With more buyers eligible and competition rising, price pressure is likely, particularly at the lower end of the market.”
REBAA Tasmania State Representative Samantha Spilsbury said there has been a noticeable increase in buyer activity in the $500,000 to $550,000 price range, with strong interest from both first home buyers and investors.
“First home buyers, in particular, are showing increased interest in outer suburban areas, where they can secure a minimum three-bedroom, one-bathroom home on a block of at least 600 square metres,” she said. “These buyers are prioritising land size and long-term value over proximity to the city, reflecting a shift in buyer preferences driven by affordability and lifestyle factors.
“There has also been a broader uplift in inspection attendance across the sub-$750,000 bracket which is a trend likely supported by the Tasmanian Government’s first home buyer incentive, which offers full stamp duty exemption on purchases under $750,000.”
ENDS
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