New Urban data shows Next Home Buyer property enquiries overtake First Home Buyer interest
Next Home Buyers are overtaking First Home Buyer interest in new off-the-plan apartments. So what does this mean for Australia's property market?
As one of Australia's largest off-the-plan property platforms, Urban.com.au experiences high volumes of traffic to our 8338+ apartment and townhome listings every day. Over the past two months, Urban has recorded exponential growth among Next Home Buyers, who have overtaken First Home Buyers as the most significant active segment in the search for off-the-plan properties.
At the start of 2019, First Home Buyers were entering the market en masse, due to APRA's loosened lending constraints, a dropping cash rate, and reinstated faith in the off-the-plan market. However, now Next Home Buyers represent over 40% of the total volume of enquiries on Urban, showing a trend which could be likely to progress into the new year.
Next Home Buyer interest wasn't the only statistic that has risen in recent months either. Today, the average value of an off-the-plan home enquired on by a Next Home Buyer currently sits at $873,538, which is 35% higher than the average home value of enquiries made by First Home Buyers.
We also took a look at the top suburbs and projects First Home Buyers and Next Home Buyers have been enquiring on in Victoria over the past six months.
How will these new statistics impact the 2020 property market?
A newly announced First Home Loan Deposit Scheme will come into effect on 1st of January 2020, which the Federal Government thought would boost first home ownership in Australia. However, Core Logic's Tim Lawless explains that this initiative will not have much of an impact reinvigorating the first home buyer market since the scheme will cap grants after 10,000 applicants.
“Looking forward it’s likely first home buyers will reduce as a proportion of overall market activity. Housing prices are once again rising across most regions of the country while growth in household incomes remain sluggish, which will create renewed housing affordability pressures in markets where home values are rising faster than incomes.”
Tim Lawless, Head of Research at CoreLogic Asia Pacific
Without enough financial assistance or affordable homes on the market for first home buyers, experts anticipate that next home buyers will become the strongest competitors as the property market picks up again.
It is also apparent that baby boomers hold half of Australia's wealth, which explains the rapidly increasing property value statistic as homeowners downsize to low-maintenance, luxury apartments and townhomes.
According to developers, here is what Next Home Buyers are looking for in a new property
"In our Shelley St campaign, the strongest and highest quality leads have been next home buyers. They are the 'been there, done that' type who appreciate good design and value, they are keen to be in the middle of it all in Richmond. More than half the leads (55%) from Urban have been next home buyers, which suits our project well."
Scott Williams, Sales & Marketing Manager at Oz Property
"These are your people from the past 10-20 years ago when every purchaser was going big…. Big land, Big house. As technology has now taken over and life is becoming more and more busier, purchasers are now looking for the low maintenance simplistic lifestyle."
Barry Devenny, Sales Manager at Wonder Property
- Location: Walkability to local amenity.
- Resell Value: The buyer may not want a bath/double vanity (etc.), but understand they need to keep it or include it to support future resale value.
- Storage: including inside apartment and in the basement. This needs to be ample! Especially for downsizers of course. We almost oversupply storage and our buyers love it.
- Pet-friendly apartments: All of our Fortis apartments are pet-friendly. This is so crucial in this day and age for so many reasons.
- Ability to customise the design of the apartment: this is a major benefit and reason they are buying off the plan in the first place!
Avalon Nethery, Development Manager at Fortis Development Group
Lead image: Mont Albert Place, credit: INQ Developments/Clarke Hopkins Clarke.
