Anything affordable doesn't last long: First-home buyers fuel Canberra market competition

Canberra first-home buyers are pushing ahead with their purchasing plans despite economic uncertainty brought on by the coronavirus pandemic, according to agents.

While stock levels remain low, agents say, in part due to COVID-19, buyer demand is still high particularly for entry-level priced homes almost as soon as they list on the market.

Tim Mardiyants of Block Real Estate said he’d seen more first-home buyers than usual, attributing the growth to the ACT government’s stamp duty abolition and the federal government’s First Home Loan Deposit Scheme.

Under the scheme, 10,000 qualifying first-home buyers need as little as a 5 per cent deposit, with the additional amount to reach 20 per cent guaranteed.

The scheme, which kicked off in January, initially gave buyers 90 days to purchase but the National Housing Finance and Investment Corporation extended the timeframe because of the pandemic.

“First-home buyers make up usually a quarter of our buyers but it has certainly increased over the past few weeks by 10 to 15 per cent and now populate almost half of the current buyers,” Mr Mardiyants said.

“First-home buyers are certainly out and about … and they are savvy. They’ve done their research and recognise the value in a home. They’re becoming more educated and aware of the market.”

Mr Mardiyants noted investors were also fuelling competition in that bracket, with properties under $800,000 “getting a lot of inquiries from first-home buyers and investors”.

“There’s not a lot of stock under that price point … when you look at Allhomes listings, anything that is between $500,000 to $800,000 is going under offer almost as soon as it lists.”

Andrew Thorpe of One Agency agreed and said a couple of properties he had sold over recent weeks were snapped up by first-home buyers.

“I had a property in Weston that was snapped up by a first-home buyer reasonably quickly and higher than the asking price for $720,000. I was quite surprised,” he said.

Mr Thorpe, who specialises in Canberra’s South, said he noticed an “increasing inquiry” from first-home buyers for properties in Gordon, Conder and Banks.

“The suburbs that are further south from Canberra’s city are quite popular for first-home buyers [because] you get more bang for your buck,” he said.

“There is not a lot of stock in the market to cater to the growing demand … and the supply will be a lot less in the foreseeable future until COVID-19 goes away, which will increase the demand on property.”

Mr Mardiyants said other hot spots for first-home buyers were in the Gungahlin region including Ngunnawal, Taylor and Casey.

“Those suburbs, as well as the Tuggeranong suburbs, are on fire at the moment. Anything affordable doesn’t last long on the market,” Mr Mardiyants said.

“As long as Canberra’s economic fundamentals remain strong, along with a combination of government incentives and the low-interest rates, Canberra’s property market will remain attractive for first-home buyers.”