First-time buyers hit property hotspots in COVID-19 window

First-time buyers are actively searching in affordable areas around Australia during the COVID-19 pandemic hoping to snap up property bargains.

Savvy first-time buyers are seizing the opportunity to secure a property while incentives are high, low deposit home loans remain on offer, and competition is low due to the coronavirus.

Despite a general drop in buyer inquiry in the wake of COVID-19, fresh data from property website realestate.com.au shows a surge in first-time buyer activity.

For example, in Queensland first-time buyer inquiries were up 23 per cent across the state between January and March, at the height of the pandemic, compared with the same period last year.

Experts say a dip in housing prices, rock-bottom interest rates, the government’s 5 per cent deposit scheme and reduced competition from investors have put those looking to enter the market for the first time in a strong buying position.

First-time buyer search activity over the past six weeks has focused on price points between $400,000 and $800,000. These price ranges allow people to get into the market with lower deposits and manageable repayments.

Real estate agents are saying first-time buyer inquiry had rebounded following a sharp drop in confidence when COVID-19 restrictions were first announced.

Whilst most agents feel that “we’re not out of the woods”, they are noticing a massive resurgence in inquiry from first-home buyers in the past two weeks.

One agent stated that “Eight weeks ago they would have had ten times the competition. What an amazing opportunity these guys have got to secure something if they’re in a position to have a crack.”

First-time buyers appeared to have some initial reservations about buying during the early COVID-19 period, however for those with job stability they appear to have the confidence to start or keep looking at property.

REA chief economist Nerida Consibee said a drop off in investors created favourable conditions for first-time buyers.

“Investors are out of the market at the moment, so it’s a good time for first-time buyers to be in it; there’s less competition,” Ms Conisbee said.

Lenders still have attractive offers available to eligible first-time buyers – and also owner occupiers who may not be buying their first home.

According to Jason Ganter, lending specialist with LJ Hooker Home Loans Brisbane East, most first-time buyers have spent up to the past five years saving and if they have a secure income they were in a comfortable position to step into the market at the moment.

Mr Ganter said “Interest rates are at all-time lows. We also have home loans where you can borrow up to 98% of the purchase price, even if you’re building. So for some first-time buyers, after government incentives they can potentially enter the market with as little as $10,000. And with low rates, in some cases they may not be paying much more than what they currently are in rent.”

Find out more about low deposit home loans

In fact, he said a lot of first-steppers would be looking for a good deal as properties from distressed sellers hit the market.

“People have learnt from other crises we have been through, where we have that severe drop-off and then consistent recovery. I would say some first-home buyers can see this is going to happen over the next few months and if they don’t get in now, they may find themselves having to wait again. They’re hoping to catch the bottom of the market.”

He said when the time was right it would be first-home buyers who benefit the most. “There will be more stock coming on to the market, which means more choice and more power to negotiate. First-time buyers will be the ones with the power.”

Your first home journey can start with a simple phone or web based chat. Our lending specialists can guide you along the way, and provide a home loan pre-approval if you’re ready to go.

At this time we’re “covid-capable” and isolation enabled which means we’re here to help get your loan approved over mobile or web.

This article is prepared based on general information. It does not take into account individual financial objectives or needs and is not financial product advice.