Property market update 29th October 2019

First home buyers and the rebounding market

There are predictions the Reserve Bank of Australia (RBA) could lower interest rates one last time in 2019. If that happens, it could happen on the first Tuesday in November, otherwise known as Melbourne Cup day featuring ‘the race that stops the nation’.

There will be a few winners on Tuesday. Most likely more losers: more than usual given the nature of the event. Which means the rules of gambling apply.

People placing a bet, should gamble responsibly. They should do their due diligence. They shouldn’t bet what they can’t afford to lose.

There are parallels here with the property market. People buying a house, should buy responsibly, conduct a stringent due diligence and pay what they can afford. The last thing a homeowner wants is for the bank to repossess the house, because the buyer overextended.

With recent stimulus packages introduced by the Federal Government and RBA, home buyers, particularly first home buyers, are being encouraged to enter the property market.

South Australia and Tasmania – First home buyer hotspots

Take South Australia for example.

The Festival State’s Treasurer Rob Lucas this month released State Government data illustrating 887 first homeowner grants worth up to $15,000 were paid out in the first three months of this financial year – a 17 per cent increase since the same period last year.

It is a 31 per cent jump compared to 2017.

The purchase or construction of a newly-built residential property, including houses, flats, units, townhouses or apartments by first home buyers is its highest in South Australia since 2014. 

“The Government is delighted that so many first home buyers, many of them young couples and individuals just starting out, have the confidence and means to enter the property market and secure their own special slice of Australia,’’ Mr Lucas said.

“At a time when the Property Council and its supporters are desperately trying to talk down the economy, these results show there is significant underlying confidence and strength in the market here.”

It’s not just the South Australia property market that seems to be on the rise.

In general, Sydney’s median house prices jumped 4.8 per cent over the quarter – gaining almost $50,000 – to $1,079,491.

That is problematic for first home buyers, unless, if possible, they buy out on the fringes. Perhaps the new scheme will help.

Yet, that particular rise is excellent news for existing homeowners.

Melbourne house and unit prices are also on the up, with house prices jumping 4.1 per cent in the quarter to $855,428, a similar increase to boom time. According to Domain, houses have regained almost half of the price falls (10.7 per cent from September 2017) that occurred during the recent downturn.

Brisbane declined marginally and Perth remains a buyers’ market.

Tasmania is attracting first home buyers

Tasmania is riding high, with Hobart the best performed city of any in Australia, increasing approximately $12,000 in value over the year. Hobart is also the most affordable capital city.

Median property prices in the Tasmanian capital were $680,500 for houses and $590,000 for units last year, according to

Median rents in Hobart are around $500 / week giving investors an annual rental yield of 3.8 per cent. Units rent for $465 / week. Over the last five years, says Hobart house prices have grown 6.0 per cent for houses and 9.8 pe cent for units.

It’s pretty nice in Tasmania, any first home buyers interested?

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