A recent article from CoreLogic highlighted that three of Australia’s capital cities are now experiencing a fall in home values. This is great news for potential homebuyers, not only in those cities, but those willing to undertake the TMAP2Step and buy what they can afford now, in order to buy their dream home later. For a first-time homebuyer looking for a good price, we believe there are several key takeaways.
Make the Most of Slowing Markets
Australia’s housing market is experiencing varied outcomes across different regions. While national home values continue to rise, some cities, such as Melbourne, Hobart, and Darwin, have seen declines over the past three months. On the other hand, mid-sized capitals like Perth, Adelaide, and Brisbane are enjoying stronger growth. For first-time homebuyers, this variation presents opportunities to find better prices in markets where growth is slowing or even declining.
Opt for Cities with Oversupply
The availability of homes for sale varies significantly between cities. Brisbane, Adelaide, and Perth, for example, have a lower supply of homes, which could sustain higher prices. Conversely, cities like Melbourne and Hobart have higher-than-average levels of advertised supply, potentially leading to more competitive pricing. This situation could be advantageous for buyers looking to negotiate better deals.
Consider Units over Houses
The CoreLogic article notes that affordability pressures are pushing demand towards lower-priced properties, with the lower quartile values leading the growth trend in most cities. For first-time homebuyers, focusing on more affordable properties, particularly units over houses, might be a strategic move. In cities where median house prices are significantly higher than unit prices, purchasing a unit could offer a more accessible entry point into the market.
Explore a Regional Move
While growth in regional housing values generally lags behind the capitals, some regional areas, such as those in Western Australia, South Australia, and Queensland, are experiencing notable growth. Buyers considering regional locations should weigh the potential for capital growth against affordability and lifestyle preferences.
Conclusion
The outlook for the housing sector remains complex. Constraints on new housing supply could support home prices but also pose challenges for affordability. First-time homebuyers should consider the long-term implications of their purchase, including potential changes in interest rates, housing supply, and market conditions. At Teach Me About Property, we can help young families find what they can afford, in preparation to buy their dream home when the time is right. Speak to us today.
