First home buyers priced out of the market
First home buyers have remained on the sidelines despite the advantage of low-interest rates and government stimulus for new properties.
SQM Research’s managing director Louis Christopher has told a property seminar in Sydney that investors and upgraders, rather than first home owners, have been driving the recovery.
“What we may be seeing is a combination of investors using self-managed superfunds to get into the property space,” he said.
“We’re seeing more developments being built in Sydney’s west, and I think investors have been jumping in on that, and I think we’ll see a lot more of it.”
While first home buyers appear to struggle with house prices, especially in Sydney, Mr Christopher believes there are still options if they make sacrifices.
“First home buyers are being priced out of the market but I think they still have choices, and this is a bit of a dilemma,” he said.
“You have to live somewhere that may not be your first choice, it may be almost your last choice, but the choice is still there.”
First home buyers may have to rent and save for longer and decide whether they want to keep up or get into the market.
“They’re getting pretty dismayed by the price rises, which have already happened,” he said.
“And what’s been happening when they try and buy properties, [is that] they’re getting priced out.”
However, Mr Christopher remains optimistic that there will be a first home buyer response in Sydney’s west as they take advantage of the $35,000 government concession.
“In an optimal world, what we would see is a pick up in first home buyers buying new homes because that generates the economic activity that the RBA is hoping for and also creates a reasonable supply response too,” he said.
For more from the SQM Conference, including the top Sydney suburbs you should be watching, read this story with gallery attached.
