Like nearly all areas of the economy, the NSW property market continues to be impacted by the COVID-19 pandemic. But it’s not all bad news.
While experts are quick to acknowledge the negative consequences of the virus, COVID-19-inspired government affordability schemes are in some cases enabling new buyers to enjoy advantages that weren’t available a year ago.
“For those first-time buyers who have lost their jobs, particularly younger employees in areas like hospitality, tourism and retail, I think that COVID-19 has certainly created a negative impact,” says Louis Christopher, chief executive of SQM Research.
“However, I think this situation has also been offset by incentives provided for first-home buyers.”
Christopher says housing finance approvals show the proportion of first-home buyers in the market has remained stable through the pandemic.
“There hasn’t been a drop-off. Indeed, there’s been a pick-up in the percentage of buyers who are buying for the first time,” he says.
NSW first-home buyers who meet eligibility requirements can access a range of government grants and incentives designed to help them get a foot in the market, including the $25,000 HomeBuilder grant introduced in June and the $10,000 First Home Owner Grant for new properties under $600,000.
The threshold for stamp duty exemptions for first-home buyers was also raised in July to include properties worth up to $800,000 (up from $650,000), with concessions on properties worth up to $1 million.
With a shortage of stock on the market, Real Estate Institute of NSW chief executive Tim McKibbin says real estate agents are struggling to meet buyer demand.
He points out that earlier predictions of up to a 30 per cent fall in house prices has failed to materialise, with the actual drop being closer to 2 per cent.
“We do have historically low interest rates, so it is definitely the time to be looking,” he says. “I can’t see a flood of stock coming onto the market pushing prices down,” says McKibbin.
For first-home buyers determined to secure property in the current environment, David Milton, managing director of CBRE Residential Projects, says new developments and off-the-plan housing remain popular.
“While it’s been a tragic year for many people, I think it’s also been really advantageous for those first-home buyers with secure employment,” says Milton, who is currently marketing a range of Sydney developments.
“Demand for our properties that meet their criteria has been strong, with buyers now considering different options.
“For instance, a lot of our first-home buyers are now purchasing in areas where they see affordability and long-term value, meaning they’ll buy in areas where they see indications of growth, such as new schools and new infrastructure.”
Milton believes that government support initiatives for first-home buyers are making property access significantly easier.
“The tremendous benefits coming from the government for first-home buyers as a result of COVID mean they can save up to $60,000, which is huge.”
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