Entry-level homes: The most active part of Melbourne’s housing market amid coronavirus
Originally published by ELIZABETH REDMAN SENIOR NEWS PRODUCER APR 19, 2020 and this article is curated and collated by Matt George, Urban Activation.
As Melbourne’s housing market starts to feel the effects of broader economic uncertainty, it’s entry-level homes that are bucking the trend.
Activity is stronger for homes at more affordable price points than for higher-priced properties where purchasers are likely to find themselves in a buyer’s market, agents report, as coronavirus sends the economy into hibernation.
Many first-home hopefuls with secure jobs who have spent months looking for a property and missed out at auctions during the recent market rebound are keen to snap up a place. While they’re competing with others well advanced in their search, few new buyers have started seriously looking, making it a little easier than two months ago.
“If they’re confident in their jobs and they’re feeling secure, they’ve got a fair amount of assistance from the government,” Melbourne buyer’s advocate and president of the Real Estate Buyers Agents Association of Australia Cate Bakos said, referring to the stamp duty concessions for first-home buyers.
“Those memories of competitive auctions and difficult buying conditions are still quite acute for them.”
She’s seeing a more active market below $1.5 million than above, with first-time buyers and investors chasing units up to $600,000, and home buyers looking in the $600,000 to $1.5 million bracket.
Rock-bottom interest rates and last year’s regulatory moves to let buyers borrow more money are also helping potential purchasers.
McGrath St Kilda’s Jesse Jones has sold three sub-$1 million properties in the past week, and was seeing interest from young buyers working in government, education, banking or large corporate firms.
“The buyers that have been in the market for the past six months to a year, that experienced the market at its peak, now see this as a window of opportunity to strike,” Mr Jones said.
“Seasoned buyers are taking action quickly because they don’t want to miss out again.”
First-home buyers Jack Bishop and Victoria Weeraphan had been looking for a property for about a year and, given their secure jobs, managed to buy a two-bedroom Windsor apartment this month for $619,000.
“We’d been going to auctions over the past six months or so,” Mr Bishop said. “They’d all be going for the high end of what they advertised or slightly over, whereas we were able to buy at the bottom end.”
Even though his agent Mr Jones said three parties had made offers, Mr Bishop said they managed to avoid overpaying.
Jellis Craig Northcote director Sam Rigopoulos is also seeing strong demand for entry-level houses from first-home buyers, often young professional couples who are renting and can buy without needing to sell their own place too.
“They don’t have to make two big decisions in one go,” he said.
“There’s a huge amount of pent-up demand for the family homes, but there’s also a bit of reluctance from some of those buyers who have got houses to sell themselves to transact.”
Single-fronted houses in the $1 million to $1.3 million range had been performing “exceptionally well”, he said, with long-term renters taking advantage of low-interest rates.
Belle Property Albert Park director David Wood reports strong buyer activity at the lower-priced end of his neighbourhood, sometimes with help from the bank of mum and dad.
“The younger ones are still buying, and obviously the ones that are still gainfully employed and consider they will be in the longer term,” he said.
“First-home buyers, and investors, and also families that are helping out with younger people buying properties.”
The Agency general manager of Victoria Peter Kakos is fielding demand from teachers and young professional couples in other stable jobs.
“Anything up to $2 million is still going along very, very nicely,” he said.
“That $2 million to $4 million bracket is still going OK, however … anything above $2 million, there needs to be a bit more of a negotiation that’s taking place.”
Anyone who sold during a busy February or early March, such as downsizers, were actively looking to buy too, he said.
“This is where Urban Activation can assist” says Matt George. We have limited supplied of quality finished developments that are having a Social Media Flurry with enquiries flooding in fast and hard with flexible developers that are keen to settle now. Talk to us at www.urbanactivation.com.au or call Lucas Giannotti today on 0418 368 205 or email at firstname.lastname@example.org
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