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This is how long it takes Brisbane first-home buyers to save for a house

home buyers

Brisbane first-home buyers have bucked a nationwide trend. They are now taking less time to save for a deposit, with closed borders, government grants and a softening of entry-level house prices launching locals onto the property ladder faster than a year ago.

Despite the city’s soaring property market recently pushing median house prices to record heights, new data from Domain’s First-Home Buyer Report, released on Monday, revealed it now takes the average couple four years and two months to save a 20 per cent house deposit – which is four months less than this time last year.

Brisbane was the only capital city to see savings time slashed over the 12-month period, with Sydneysiders forced to tack an extra six months onto their already painfully slow savings haul – which is now seven years and one month for the average couple.

Time to save for a 20% deposit on an entry-price house

Entry price Time to save Annual change, months 5-year change, months
Sydney $770,000 7y 1m 6 11
Melbourne $631,000 6y 1m 0 13
Brisbane $429,000 4y 2m -4 2
Adelaide $405,000 4y 1m 3 4
Perth $395,000 3y 7m 2 -3
Hobart $455,000 4y 11m 6 22
Darwin $440,000 3y 8m 6 -4
Canberra $691,000 6y 9 20

Domain senior research analyst Nicola Powell said the data revealed just how sunny the market remains in the Queensland capital – with grants and wage growth easing the squeeze for first-home buyers alongside COVID, which had worked wonders for savvy savers.

“Brisbane bucks the trend really in terms of what we’re seeing across our other cities, and while it doesn’t have the quickest time to save, it’s seen more favourable conditions over the past year,” Dr Powell said.

“It was the only city to see a decline in time for houses while for units it remained stable … and what we’ve also seen is tax cuts and compounding interest on savings have helped speed up that time.

“I think over the past 12 months, we’ve all saved more, and for first-home buyers, it has supercharged their savings pot … the pandemic has also really unlocked an element of affordability. For those first-home buyers who can work from home, they are able to now seek different locations to reside, which opens the door to affordability.”

Time to save for a 20% deposit on an entry-price unit

City Entry price Time to save Annual change, months 5-year change, months
Sydney $590,000 5y 5m -4 -6
Melbourne $440,000 4y 3m -2 1
Brisbane $340,000 3y 4m 0 -5
Adelaide $278,000 2y 10m 0 0
Perth $275,000 2y 6m 1 -3
Hobart $390,000 4y 3m 2 20
Darwin $248,000 2y 2 -18
Canberra $397,000 3y 5m 0 1

While the Domain report revealed it takes a first-home buyer just one year to save for a house with a five per cent deposit using the federal government’s First Home Loan Deposit Scheme, Dr Powell warned the road to property ownership was still tough.

“It’s still a long journey time to save … and for any single person, that time is double. So, I think there are two sides to affordability and what we have seen is home loan repayments have improved thanks to falling interest rates, but the hurdle is saving for that deposit,” Dr Powell said.

North Brisbane Home Loans CEO and mortgage broker Patrick Cranshaw said over the past year, the swathe of first-home owner grants released in response to COVID had sent first-home buyer numbers soaring – with young couples quick to pounce on low interest rates and money-saving schemes.

“The property market has also softened in the past two weeks, and there hasn’t been as much activity, and it levelled off a bit, so for some first-home buyers – if they are in a couple situation on $70,000 each – they certainly have the capacity to pay that loan down, so it’s just coming up with the equity and the deposit,” Mr Cranshaw said.

Federal government initiatives and the impact on time to save for an entry-priced home

Houses Units
5% deposit FHLDS $60k FHSSS (based on couple) 5% deposit FHLDS $60k FHSSS (based on couple)
Sydney 1y 9m 4y 3m 1y 4m 2y 8m
Melbourne 1y 6m 3y 2m 1y 1y 4m
Brisbane 1y 1y 3m 10m 4m
Adelaide 1y 1y 8m 0m
Perth 10m 10m 7m 0m
Hobart 1y 2m 1y 8m 1y 11m
Darwin 11m 1y 2m 6m 0m
Canberra 1y 6m 3y 5m 10m 10m

“But I 100 per cent think Brisbane is still affordable when you compare the money they earn to the purchase price … that’s why so many people moved to Brisbane. There’s value here.”

Roxanne Paterson of Ray White Bracken Ridge said while the stars were indeed aligning for local first-home buyers, they were facing incredible challenges due to increased interest from interstate and rising house prices.

“What’s frustrating for them in one regard is when buyer’s agents are out in force as well as investors – they are getting thrown into some pretty significant competition,” Ms Paterson said.

“And they can’t just offer an extra $30,000, but they are in competition with clients who have money at their fingertips.”

In Bracken Ridge, a suburb that Ms Paterson said had always been a hotspot for first-home buyers, the sizzling market sent entry-level house prices soaring over the past 12 months, with $500,000 houses now fetching $100,000 more.

“Here we are that last stop before the end of Brisbane City Council, so we do have a lot of first-home buyers coming in … but now they are having to stretch themselves or go further out for a house. That said, I think they are still giving it a red-hot go,” Ms Paterson said.

It was that enticing melting pot of grants and the inability to travel that inspired Sarah Bauer and Luke Bishop to buy a three-bedroom house on a 600-square-metre block in Arana Hills for $654,000 through Ms Paterson just a week ago.

“We spent the majority of 2020 really knuckling down because we wanted to go into this process with no debt … and COVID helped 100 per cent because we had two overseas trips planned for last year. I mean, my Uber Eats bill probably went up, but in terms of not being able to travel and not go places meant we could save much more,” Ms Bauer said.

“Then we started looking seriously in January … and to be honest we got in as it started to get super hectic and the first house that we put an offer on, we actually offered $30,000 over the listing price, but it sold for $60,000 more, so straight away we thought we were so out of our league,” Ms Bauer said.

“So, we took a step back and had to look at what suburbs were taking off and which ones were still affordable because Brisbane is hectic. We were both set on the north side of Brisbane, and we didn’t want to go further than 15 kilometres from the city as we work there … but then as we got knocked back, we had to look further out.

“The third house we put an offer on (in Arana Hills) was listed at $589,000, and we offered $650,000, and then it sold for $800,000 … there were 46 offers on that one, so you’re just competing with ridiculous offers.”

But while the couple, who spent a solid year saving to boost their own personal pot, confessed the constant knocks almost forced them to step back, it was fear of missing out that kept them in the game.

“We wanted to get our foot in the door, especially if this was going to be the lowest it would be in a while and in the end, I think we were quite lucky,” Ms Bauer said.

Across Greater Brisbane, first-home buyers in Springwood-Kingston enjoyed the biggest cut on time spent saving for a house, where it is now taking 14 months less than a year ago to save a 20 per cent deposit. At the other end of the spectrum, couples looking to buy their first house in Brisbane Inner are facing an extra 10 months of savings time, where a 20 per cent deposit on the median house price is now $182,000.

 

Article Source: www.domain.com.au

Brisbane

Record auction figures in December as Australia’s property market plays catch up

Auction

A surge in post lockdown supply coupled with buoyant market conditions, led to unprecedented levels of auction activity across Australia in the final three months of 2021.

CoreLogic’s Quarterly Auction Market Review shows 42,918 properties were taken to auction across the combined capital cities in the three months to December 2021, an 85.1% increase from the previous quarter and more than double (109.5%) the December 2020 figures.

CoreLogic’s Research Director Tim Lawless says several factors resulted in the surge in auctions, including some catch-up from the September quarter when the largest auctions markets were weighted down by lockdowns as well as a pickup in activity following the seasonally slower conditions of winter.

“The large number of auctions held through the December quarter also reflects the strong selling conditions that were present, which motivated vendors to capitalise on strong buyer demand and the significant rise in values seen through the pandemic,” he says.

“Auctions as a way of selling tend to be more popular during a sellers’ market; in this situation buyers are highly competitive and incentivised to outbid rival purchasers in order to secure a property. During cooler market conditions an auction may not attract as many registered bidders or as much competitive bidding.”

In Australia’s two biggest auction markets, Melbourne had 19,788 auctions and a clearance rate of 69.7% for the December quarter compared to Sydney, where 14,906 auctions were held at a clearance rate of 69.9%.

Across the combined capitals, the quarterly clearance rate of 71.3% was only slightly down on the previous quarter results of 71.7%.

However, as the quarter progressed and the volume of auctions held increased, the clearance rate progressively trended lower to 61.1% in the week ending 19 December, 2021.

Mr Lawless says higher auction volumes will often correspond with lower clearance rates as demand becomes more thinly stretched.

“The surge in the number of auctions through the final quarter of 2021 was accompanied by a consistent trend towards lower clearance rates, with this trend evident across each of the capital cities,” he says.

“The drop in clearance rates implies demand didn’t quite keep pace with the level of auction supply during the quarter.”

In the smaller capitals Brisbane (3027 auctions, clearance rate of 74.9%), Adelaide (2902 auctions, 80.5%) and Canberra (1949 auctions, 82.4%) also recorded significant increases in volumes compared to Q3 2021, and the corresponding quarter in 2020.

auction At a granular level, the suburb of Wishart, 12km south-east of Brisbane’s CBD, recorded a 100% clearance rate, the highest in the country, with all 28 properties scheduled for auction in the December quarter selling under the hammer.

The heightened auction volumes in Brisbane and Adelaide echoed the cities respective housing strength, where values continued to rise at cyclical highs through December, prompting a higher proportion of properties being taken to auction.

Auctions in Australia’s regional areas also increased substantially over the quarter. Larger centres such as Newcastle, the Illawarra, Geelong and the Gold and Sunshine coasts in Queensland, each saw a surge in auction volumes, reflective of the tight housing market conditions that currently exist in the country’s popular coastal areas and lifestyle-oriented markets.

In the week ending January 23, 2022, close to 460 auctions are scheduled across the capital cities, almost 40% higher when compared to the same period a year ago. However, Mr Lawless says it’s too early to forecast the auction market trend likely to prevail in 2022.

“Overall advertised supply levels generally remain below average across most of the capitals suggesting sellers are still benefitting from strong selling conditions,” Mr Lawless says.

“Auction volumes tend to ramp up through early February and move through a seasonal peak in the weeks prior to Easter. Over the medium term we are expecting listing numbers to gradually normalise which should see buyers regaining some leverage in the market over time.  If this is the case, we could see more vendors reverting to private treaty sales rather than auctions as competitive tension amongst buyers eases.”

A full city-by-city suburb analysis, where at least 20 auction results were reported over the December quarter, can be found in the report.

 

Article Source: www.corelogic.com.au

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Brisbane

High Rollers Spending Big in South-East Queensland’s Premium Market

Market

The Gold Coast continues to rise above the pandemic, providing bang for buck for many ultra high-net worth individuals who bought into the unyielding prime residential market.

The region recorded a 156 per cent increase in annual sales turnover for prime residential property, the biggest in the country, according to Knight Frank’s Australian Prime Residential Review report.

Knight Frank head of residential research Michelle Ciesielski, who authored the report, said Gold Coast property had chalked up a 10.5 per cent increase in prime prices, the second-highest behind Sydney at 10.7 per cent.

“The Gold Coast saw the biggest rise in prime annual sales turnover at 156 per cent, followed by Brisbane at 135 per cent,” Ciesielski said.

“Gold Coast prime properties were on the market 19 days less on average [than the previous quarter], the biggest reduction across Australia.”

The Gold Coast also offered more for your money.

According to Knight Frank data, US$1 million would buy you 124sq m of luxury floor space in the Gold Coast, while in Melbourne it could buy about 88sq m and a paltry 44sq m in Sydney.

Prime residential performance, third quarter 2021

Region Capital Growth YoY Sales Volume YoY Gross rental yield
Sydney 10.7% 119% 2.07%
Melbourne 6.5% 85% 2.69%
Brisbane 8.4% 135% 2.41%
Perth 10.4% 120% 1.78%
Gold Coast 10.5% 156% 3.48%

^Source: Knight Frank Australian Prime Residential Review

Sherpa Property Group chief executive Christie Leet told The Urban Developer late last year that beachfront prices at nearly $20,000 per square metre were “towards the top end, well and truly”.

“There’s a fair argument that we might have hit a peak,” Leet said.

“But there’s still plenty of people out there buying tower sites that are going to take three or four years to develop.”

Towards the end of 2021 there were more than 50 residential projects with an estimated investment value of $4.8 billion under construction on the Gold Coast.

Nationally, the third quarter of 2021 was the second highest on record for prime sales, recording 1971 properties sold, while the volume of prime sales was up 119 per cent across the year ending September 2021.

Knight Frank forecast prime prices would increase 11 per cent across 2021, and a further 8 per cent in 2022.

Luxury rental prices on the Gold Coast have risen 10 per cent with yields the strongest in the Australian prime residential market at 3.48 per cent.

The pace of development of prime apartments and townhouses across Australia has slowed. About 26,700 new high-end apartments and townhouses were built in 2020, while the pipeline was 42 per cent less for 2021 with just 15,500 under construction.

Almost half of these new apartments are for the Melbourne market (7450), while Sydney and the Gold Coast were slated for more than 2000 properties each.

Globally the strongest prime residential capital growth was recorded in Miami, followed by Seoul, Shanghai, Moscow and Toronto.

Sydney was ranked 14th, followed by the Gold Coast (15th) and Perth (16th). Brisbane was at 21, while Melbourne came in with a middling performance at 24.

 

Article Source: www.theurbandeveloper.com

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Opinion

How home loan mortgages rose in 2021 to record levels

home loan

Lender records were broken in every state and territory except WA, according to the ABS data

Purchases by NSW owner occupiers came with mortgages sat at around $770,000, according to the latest lending data.

The national average mortgage size for owner-occupiers has reached a record high of $595,568 according to ABS data.

Records were broken in every state and territory except WA.

The national mortgage was up $92,404, an 18% hike over the year.

The November ABS Lending Indicators, released 14 January, advised the loans were for the purchase of new and existing dwellings.

The national average mortgage size for owner-occupiers has reached a record high of $595,568 according to new ABS data out today.

Records were broken in every state and territory except WA, according to the ABS data in original terms.

Victorian home buyers saw the biggest jump in their mortgages, up 24% or $120,000 to $618,602.

Average new owner-occupier mortgage size, November 2021

Amount Year-on-year change
National
$595,568 $92,404 18.4%
NSW
$769,459 $125,112 19.4%
Vic
$618,602 $120,032 24.1%
Qld
$513,649 $73,604 16.7%
WA
$439,578 $22,868 5.5%
SA
$421,801 $38,016 9.9%
ACT
$585,859 $58,434 11.1%
TAS
$445,915 $73,175 19.6%
NT
$433,333 $53,271 14%

“Demand for Aussie housing remains firm, but affordability has decreased because home prices have surged more than wages,” Ryan Felsman, senior economist at CommSec noted.

“In November housing stock was high and the country’s two largest states were freshly out of lockdown, so it’s no surprise to see a rise in new lending,” RateCity.com.au research director, Sally Tindall, said.

“Growth in property prices is starting to slow on the back of fixed rate rises and a crackdown by the regulator, but the opening up of borders this year will increase demand, keeping prices moving north,” she forecast.

The data did not include refinancing, nor renovation loans.

Renovation loans surged by 18 per cent in November to a record $569 million. The value of lending for renovations is up by a massive 115 per cent on a year ago.

Canstar analysis showed Australian mortgage holders refinanced $15.72 billion worth of loans to a new lender in November 2021, down 2.3% from October.

 

Article Source: www.urban.com.au

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