Bright future for first home buyers, says QBE

If you’ve been waiting for the perfect time to enter the property market, there’s good news - QBE research has found that house and unit prices will likely continue to plunge in the next three years.

In their Australian Housing Outlook 2018-21 report, it was revealed that Sydney and Melbourne median house prices are set to fall by 1.2% and 2.5% respectively by 2021.

QBE CEO Phil White said in the report that these markets will see changes after a decades long property boom.

“We are now seeing the predicted softening in both the Sydney and Melbourne markets after many years of growth,” he said.

“First home buyers are surging back into these markets replacing some of the demand left by retreating investors.”

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The QBE report revealed that first home buyer lending increased by 74% in the 12 months to June 2018, and Mozo Property Expert Steve Jovcevski agreed the surge of these buyers down to stricter lending practices deterring investors.

“We’ve seen banks tighten their lending criteria and scare off investors in the last year or so, leaving space for new home buyers looking to occupy to start their ascent up the property ladder,” he said.

While property prices are declining in Sydney and Melbourne, homeowners in Adelaide, Brisbane, Canberra, Hobart, Darwin and Perth can expect house price growth between 5% and 12.4% from now until 2021. 

Stamp duty concessions pave way for new home buyers

The QBE report cites further stamp duty exemptions and concessions as another factor influencing the first home buyer boom in NSW and Victoria.

In NSW, the July 2017 changes meant that first home buyers would be exempt from paying stamp duty on homes valued up to $650,000, and would receive a stamp duty concession on homes bought for $600,000 to $800,000.

“What a lot of first home buyers don’t realise is how expensive stamp duty is, and that if you can avoid paying it, it’ll help you get ahead,” said Jovcevski.

“However, with average house prices well over the $600,000 exemption cutoff, it’s looking more likely that the benefits will be more strongly felt by those looking at buying units.”

To find out how much stamp duty could cost you, head over to our state-based stamp duty calculators.

And ff you’re one of the lucky Aussies ready to snatch up your first home, first on your agenda should be finding a great home loan and seeking pre approval. Mozo’s home loan comparison tool can help you compare competitive home loan rates and features on the market to get you off on the right foot.