While property sales remain fairly flat throughout Brisbane, first time buyers are running, not walking, to purchase a home.
Brisbane’s first-time buyer market has started off the year in a whirlwind, where crammed open houses, multiple offer situations and fierce competition is now par for the course.
Rod Westerhuis, of Remax, said Brisbane was now a two-speed property market.
“If you’ve got what everyone wants, you’ll have 40 people through your first open home and sell within days. If you don’t have what people want, it’ll be tumbleweeds,” he said.
“And what everyone wants right now is starter homes. Anything in the first-time buyer price bracket is absolutely mental.”
Mr Westerhuis said there was a massive shortage of entry-level property in Brisbane, which accounted for the high demand.
“It’s simple: there’s not enough supply. The reason there’s not enough supply is because the people currently living in the homes in this price range are just not moving … whether that’s because of job insecurity or they can’t afford it, they’re not selling and upgrading. Therefore there’s low supply,” he said.
“There’s massive competition every time a new house is listed … often they’ll end up going $30,000 to $40,000 over the list price.”
Domain chief economist Andrew Wilson confirmed that while sales activity and price growth in Brisbane remained steady overall, the past six months had been busy for first-time buyers.
“First home buyer numbers are clearly reviving in Brisbane … [they’re] taking advantage of generous government incentives and low interest rates and recently modest prices growth are keeping them in the game,” he said.
Lea Drescher, of Remax Carina, described the last six months of sales in the first home buyer category as “crazy”.
“We collect multiple offers on these houses after the first open home. Every time,” she said.
“I could sell these properties within the first day they’re listed but to get the best price possible for my owners, I always keep taking offers until after the first open home.
“There’s just not enough stock. I normally have eight to 12 listings in this price range at any given time; these days I’m lucky to have six to eight.”
Mitchell Smith, of Place Annerley, recently sold a four-bedroom, one-bathroom postwar home in the leafy southside suburb of Tarragindi for $650,000 after the first open house, where people lined up outside to wait their turn to inspect.
The house, 8 Playfair Street, was in completely original condition and “not exactly liveable”, Mr Smith said.
“The amount of money these buyers are spending on their first home seems to keep creeping up and up and that’s mainly due to the competition involved. When there’s that many people vying for a house because there’s a shortage of entry-level homes, it’s inevitable,” he said.
“The further out you go, prices will drop but the level of competition and demand is still there.”
Daniel Goodwin, of LJ Hooker Graceville, said while there was definitely a shortage of entry-level homes, there was also a sense of urgency from first-time buyers anxious to get on the property ladder while interest rates were low.
“They want to buy while they can lock in at a low rate for five years,” he said.
First-time buyers were also snapping up apartments that have been reduced by developers, he said.
“Some of the stock in these developments in and around the CBD has hung around a long time … there’s also been a slowdown from investors purchasing apartments,” Mr Goodwin said.
Research officer Alana Hawkins, 26, just moved into her new one-bedroom apartment at Annerley, in Brisbane’s inner south, after a whirlwind purchase process.
She had spent two years diligently saving for a deposit but when it came to buying somewhere, she moved fast, falling in love with the first property she saw.
“I got the loan sorted, went online and found this apartment and put in an offer [of $248,000] after my first inspection. It just felt like home,” she said.
But for first-time buyers Brendon and Lisa Ward, the process was not so swift.
The couple, who last year moved from New Zealand to Brisbane, spent nearly two months fighting crowds at weekend open homes before landing a Queenslander property at Mount Gravatt East for $610,500.
“The first Saturday we ended up looking at 11 or 12 homes. We could see very early on how quickly houses were moving,” Mr Ward said.
“We put an offer in on one house which ended up going for a lot more than what we had offered – we learnt quite early on as part of the process that we needed to have our finance sorted and be ready to move as soon as we saw something we liked.”
When the couple found their house at Mount Gravatt East, they were one of 12 buyers who made an offer after the first open home, two days after it had been listed. They had to increase their offer twice before they secured the property.
“My advice to potential first-time buyers is to make sure you’ve got all your ducks lined up so you can put in a decent offer straightaway,” Mr Ward said.