In a year marked by eager activity in Australia’s property sector, first home buyers have made significant strides, attaining a 13 per cent year-over-year increase in property acquisition, as reported by the Real Estate Buyers Agents Association of Australia (REBAA). The data from the Australian Bureau of Statistics suggest that December 2023 saw a 12.9 per cent uptick in new loan commitments for owner-occupied, first home buyers compared to the previous year.
Melinda Jennison, President of REBAA, shed light on the leap in activity, particularly in the latter part of the year, attributing it to the stabilisation of interest rates. She explained, “Many first-time buyers were waiting in the wings for a clearer interest rate picture to emerge, which was the case at the end of last year.” Jennison projected a favourable future for those entering the housing market, saying, “Indeed, it certainly looks like this year will be about interest rate reductions rather than rises—a positive scenario for all mortgage-holders.”
The driving force behind this rush for homeownership, Jennison suggested, is the ongoing rental crisis, which has pushed many towards buying over renting. She highlighted the financial sensibility of this shift, saying, “Rising first home buyer activity is often the case when we experience periods of strong rental growth, with many tenants often running the numbers to discover that becoming a property owner makes more financial sense for them.” For Jennison, the importance of home ownership extends beyond personal aspirations; it is a key to securing a financial future.
REBAA’s president underlined the allure and necessity of comprehending government schemes such as ‘Help to Buy’, emphasising the importance of aligning such initiatives with the long-term objectives of individuals. “But schemes like this, as well as First Home Owner Grants, need to be thoroughly understood to ensure the properties for which these schemes apply align with the longer-term goals of the individual,” she advised.
To navigate the complexities of the market, Jennison offered pragmatic guidance for first-time property purchasers. She stressed the significance of a well-calculated buying strategy, saying, “Your first property won’t be your last, but it is important that it is the best dwelling you can afford to purchase with the most upside potential.” The strategy isn’t just about thorough research, she asserted, but ensuring the first purchase sets the foundation for future financial growth.
Recognising the emotional weight of first home purchases, Jennison urged buyers to be flexible. She captured the essence of pragmatic purchasing, stating, “Unfortunately, many prospective homeowners are not prepared to compromise on locations, or dwelling sizes, that they simply can’t afford and wind up doing nothing.” She warned against the high cost of unrealistic aspirations, advocating for a more measured approach that views the first home as a practical step rather than an ultimate dream.
Jennison’s third tip was centred on the importance of preparation, including understanding budget constraints and securing professional advice. She stated, “Having a conveyancer or solicitor to help guide you early on, as well as provide contract reviews, before submitting an offer is non-negotiable.” In her counsel, the collaboration with a team of professionals can provide the necessary support to bridge the gap of inexperience for first-time buyers, allowing for a smoother and more informed entry into the realm of property ownership.