Written by: Greville Pabst, Executive Chairman of WBP Group
What is clear is that the market for property under $750k is in very strong demand amongst first home buyers. This group currently represents only 15 % of our market but government stamp duty changes and grants have made this sector very competitive. Ultimately, these incentives will drive property prices higher within this price range which will defeat the purpose of these incentives. But we knew this was going to happen and encouraged our clients to get in and buy before these incentives kicked in. We don’t like unnecessary competition. The north and west of Melbourne continues to lead activity for houses under $1m.
If it were me?
Our property market is polarised. Houses have grown 17% to date, but units have grown by only 4.6%. It is clear that fewer houses are being offered for sale and when they are offered they are met with a wall of demand. More often we are renovating our houses, rather than selling and buying a house and paying massive stamp duties and transaction costs. The supply, density and quality of family friendly apartments is a real concern for me, which is why growth has not been as strong, compared with houses.
What would I do? If I had under $1.3M to spend, I would buy a house as close to the Melbourne CBD as possible, preferably within walking distance to a village. Luckily, Melbourne has them in spades. Buy a house that sits on highly valuable land. It is land that appreciates, whilst buildings generally depreciate. Make sure the land component represents at least 60% of the value of the property. And importantly, make sure the property you are buying has a past history of property growth.
PropertyDuo is a solutions driven property advisory service that is underpinned by WBP Group’s 25 year history, experience, data and risk analytics.
Independent advice that is backed by data insights is a must for first home buyers to make sure you are not losing money and time looking at properties you really can’t afford.