While Australia slowly recovers from the hit of a worldwide pandemic and the worst recession in almost a century, first home buyers have been flocking to the Brisbane property market and open homes each weekend in the largest numbers the market has seen since the Global Financial Crisis (GFC) in 2007.
Home loan activity
According to the Reserve Bank Governor Philip Lowe, now is the time for first home buyers to jump on the property ladder as “interest rates are low and they’re going to stay low”.
The Australian Bureau of Statistics has reported a surge of first home buyer loans which were approved across the nation in October 2020. This was more than 30 percent higher than any month since March 2009, when home loan grants were tripled temporarily as part of the Australian Government’s response to the Global Financial Crisis.
Out of the 13,481 first-home buyer loans approved in October 2020, 3,310 were approved in Queensland alone.
First Home Buyer Loan Commitments in Queensland
Source: Australian Bureau of Statistics
Appetite for Brisbane Real Estate
Real estate agents around the Brisbane area have expressed views of never having seen the property market this competitive among first home buyers before. However, driven by ultra-low interest rates, evidently first home buyers have been given quite a bit of incentive to lunge into the property market.
BIS Oxford Economics Residential Property Prospects 2018-2021 report predicts that the Brisbane market will continue to grow modestly and the value of Brisbane properties will go up over the next two years. This is partly due to internal migration of people moving north from Sydney and Melbourne as well as general expected population growth.
Brisbane properties had already grown an average of 0.6 per cent in November 2020 and by 1.5 per cent over the past three months.
Top suburbs attracting first home buyers
Lending is up 39 per cent for first home buyers looking to secure their first property in Queensland. This is the strongest growth compared to any other State or Territory.
So, which areas are showing the strongest first home buyer lending activity in South-East Queensland?
- Logan City, including Browns Plains – 4118 loans (+106% in lending)
- Gold Coast, including Coomera – 4209 loans (+94% in lending)
- Greater Springfield (Ipswich) 4300 loans (+67% = most lending)
- Central Ipswich – 4305 loans (+93% in lending)
- Ipswich, including Karrabin – 4306 loans (+58% in lending)
- Brisbane, including North Lakes – 4509 loans (+99% in lending)
Prices tipped to rise in 2023
First home buyers are being encouraged to take advantage of property prices and interest rates within the next two years before expected price hikes hit. An independent report examined five-year projections for housing supply and demand in Australia and found there was limited time for first home buyers to capitalise on the softened housing market.
“From 2023 onwards a projected rapid recovery in demand coupled with a delayed supply will drive market under supply,” the report said.
The National Housing Finance and Investment Corporation (NHFIC) Chief Executive Officer Nathan Dal Bon said the excess housing supply forecast for 2021 and 2022 begins to reverse in 2023 and beyond, with new demand expected to exceed supply by over 100,000 between 2023 and 2025.
Government grants and incentives currently offered
Brisbane City Council: A 50 per cent rates rebate for eligible first home owners of up to $1000 or a 100 per cent rebate for those who build or buy a brand new home.
Queensland Government: A $15,000 grant to put towards buying or building a new house, unit or townhouse (valued at less than $750,000). The government also offers stamp duty concessions to some first buyers if the home is valued under $550,000.
Commonwealth: Scheme for eligible first home buyers to purchase or build a new home with a deposit of as little as 5 per cent as well as the ability to make contributions into your super fund to save for your first home.
HomeBuilder Grant: For building contracts signed between 1 January 2021 to 31 March 2021, a $15,000 grant is available to certain individuals who build a new home, buy an off the plan home, or substantially renovate an existing home. The grant cannot be used to buy an existing house and is limited to Australian citizens earning less than $125,000 or couples earning less than $200,000.
The value of new builds is capped at $950,000 for NSW, $850,000 for VIC and $750,000 for all other States and Territories. For renovations, the home must be worth less than $1.5 million before the renovation, and projects must cost between $150,000 and $750,000.
Key dates: The building contract must be signed between 1 January 2021 and 31 March 2021, and work must commence within six months of the contract date. Applications must be submitted by 14 April 2021.
How can Attwood Marshall Lawyers help?
Attwood Marshall Lawyers is an experienced electronic conveyancing firm. We have an office in the Brisbane CBD, as well as offices on the Gold Coast, Sydney and Melbourne. Our team can assist buyers with residential homes and investment properties in both Queensland and New South Wales.
Our experienced property team ensure first home buyers and property investors receive the most professional property law services when making their purchase.
