Despite a drop off in activity, first home owners should not be underestimated as a strong area within the property market, an industry expert has said.
Ken Morrison, executive director of the Property Council NSW, says prospective first home owners will continue to be a large part of the property market, despite the Federal Government beginning to wind back its grants.
“They will be a force. Most people are experiencing some declines in the first home buyer’s market, but obviously that market will still exist. And you’ll just have to wait and see what the drop in the grants to their pre-stimulus levels does, in terms of an impact on the market.”
Morrison says this is why the NSW State Government has halved stamp duty for houses under $600,000, in an effort to keep first home buyer’s activity high.
Additionally, Morrison rejects the notion the property market is moving back to its pre-crisis levels, saying the availability of funding will make it harder for first home owners to enter the market.
“This isn’t a normal property market, as we don’t have the access to credit we used to. So it’s still very difficult to get the new supply of housing through, and that’s why we’re saying the NSW Government should extend its stimulus to build a bridge to recovery, and not let the first home owner’s grants drop off now without doing anything.”
The comments come as figures from the Australian Bureau of Statistics show the proportion of loans given to first home buyers was 26.1% in September, compared to just 18.7% in October 2007, before the financial crisis began.
Meanwhile, auction results have remained strong over the weekend, with Melbourne recording a 27th consecutive weekend with clearance results over 80%.
“Another indication of the high levels of competition at auctions this year has been the very low numbers of homes selling after (half this time last year), but on the day of the auction,” Real Estate Institute of Victoria chief executive Enzo Raimondo said in a statement.
The city recorded 795 properties on auction, with 600 sold resulting in a clearance rate of 83%. Sales totalled $426 million.
In Sydney, clearance rates reached 68%, with 175 properties sold out of 244 on the market. Sales totalled $122 million.
Brisbane results weren’t as positive, with just five properties out of the 14 on the market selling, leading to a clearance rate of just 36%. In Adelaide, 11 properties out of 23 sold, resulting in a clearance rate of 48%.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
