Is there a break in the market for first homebuyers?
CoreLogic recently reported an increase in housing availability over April and May 2017. With more properties on the market in 2017 than there has been during the same period since 2012, this year may be shaping up to be a promising one for first homebuyers. If you’re yet to delve into your home loan options but you’re watching the market, now is the time to start browsing mortgage deals. It looks as though there is about to be a break in the market for first homebuyers.
Increased house supply
CoreLogic’s report collected housing data from the eight capital cities in 2017. The number of unique property listings were compared with the total sales in each city. When the ratio of listings to sales were completed, the analysts compared these with sales numbers and figured out how many months each city would take to ‘clear’ all of these listings.
Overall, Australia’s capital cities have a greater number of available dwellings, but some cities don’t reflect the national trend. Canberra deviated from this trend the most, with a mere 2.6 months worth of housing supply, the same as 2016, however, that is still the lowest it’s been in the last five years. Darwin was not far behind, offering only four months worth of supply, the latest in a steady decline in housing supply since 2012.
Perth on the other hand currently has 8.3 months of housing supply, down slightly from last year, yet still has close to twice as many houses on the market as there was in 2013. Sydney, Brisbane and Melbourne are also showing their highest numbers of property listings since 2012.
The increasing supply of houses on the market is in large part due to the slow reduction of property transactions over these last few months, rather than an increased number of listings. With a diminished demand and increased supply – how will this effect first homebuyers?
The increase of housing stock in centres like Sydney, Brisbane and Melbourne is a great sign. As these cities are the areas with our highest population density and highest number of jobs, a rise in availability could mean many opportunities for first homebuyers to secure a home loan and buy their first property.
According to a recent report from the Australian Housing and Urban Research Institute (AHURI), much of the additional housing supply exists in the mid to upper price ranges. While this appears to have negative implications for first homebuyers, it’s not all bad.
Of course, some first time buyers will be looking at more modestly priced properties, and might not find an abundance of homes in their price bracket. An opening in the medium price range is promising however, as those looking to move into larger or more upmarket properties should leave entry level properties available in their wake.
With the housing supply only recently beginning to increase, it will be a number of months before the trickle down effects can properly be measured. The downsizing incentives for retirees that were announced in the 2017 budget mean we could be about to see a further increase in supply. Things do look promising and a number of first homebuyers could find their ideal property on the market this year.
Are you looking to take your first step onto the property ladder? Beyond Bank has a huge range of home loan options available and we’re confident we have the perfect deal for you. Get in contact with us today.