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Brokers have noticed a resurgence of interest among opportunistic first home buyers who are trying their luck at entering the property market.
A combination of faster wait times, pre-approvals and good serviceability in regional markets has proven to be beneficial, Victorian broker Matt Turner at GSC Finance Solutions has observed, noting a “strong comeback” for first-time buyers.
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Mr Turner said: “Couples with good incomes and a solid savings history are not facing as many challenges at the moment.”
However, he pointed out first-time buyers in capital cities have additional serviceability challenges, with property prices reaching new heights, again.
As such, principal and broker of Mortgage Choice, Richard Brown, said with home values soaring in Sydney, many clients are “demotivated” and are looking at investing in interstate properties in the medium term to build some capital and equity.
In fact, regional NSW was the most desirable location for those leaving capital cities in the September quarter, overtaking regional Queensland, according to Regional Australia Institute.
“My experienced clients are not rushing in to buy either in Sydney, most believing that mid-2024 there will be the pinch felt by these increases and more stock available,” Mr Brown said.
Two of his younger clients were looking for property with dual living, to have the flexibility to rent out the main house and living in the granny flat, to help with rising interest rates and high property prices.
“[It] makes perfect sense for singles or couples who don’t have kids yet,” Mr Brown said.
According to the Australian Bureau of Statistics (ABS) latest lending data, there has been a 3.1 per cent increase in first home buyers (FHBs) entering the market in the year up to September 2023.
Mr Brown visits around three to four auctions in the local area of North Epping, Beecroft and Eastwood in Sydney a week and has observed “hopeful younger couples” trying their luck at entering the property market.
Generally, there has been an uptick of people attending auction, between 20 and 30 people, with FHBs and opportunistic investors bidding early, however, often hitting their limit before $2 million.
“In my area, even in the last week there has been a noticeable increase in the heat of bidding,” Mr Brown said.
According to CoreLogic, Sydney is on track to record the busiest auction market this week, with 1,161 homes scheduled for auction, up 8.4 per cent week on week, set to overtake last week’s ‘Super Saturday’ event (1,071).
This would mark Sydney’s busiest auction week since mid-April 2022 (1,490).
Mr Brown emphasised the value of gaining on-the-ground experience at auctions to support his clients.
He mentioned that clients often seek his advice on the best way to bid at auctions, but he refrains from approaching people, as he considers auctioning the “domain of real estate agents”.
Director and senior mortgage broker at Mortgage Domayne, Mark Polatkesen, said that serviceability continues to be an added challenge for first-time buyers.
“I think if servicing rates could be reviewed, that would be great,” Mr Polatkesen said.
He explained, that borrowers have to juggle things – like reducing credit cards or car loans and their overall debt burden to meet serviceability – whereas in the past they didn’t have to do any of that.
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