Between rate cuts and changes to the first home buyers scheme, complexes such as De Burgh on Northbourne Avenue are surging in popularity. Image: JWLand.
On the back of interest rate cuts and recent changes to the First Home Buyer’s Scheme, a surge of interest has made Canberra suburbs and developments hot property.
Molonglo Valley, Throsby and De Burgh in the Northbourne precinct are among standout areas where buyers are flocking since changes came into effect, according to Civium residential director Wayne Harriden.
Since 1 October, the scheme lifted limits on the number of government guarantees available, giving all Australian first home buyers the chance to purchase a home with a deposit as low as five per cent and no Lenders Mortgage Insurance.
“Some very clever people jumped in before October 1, but the first weekend after the changes came in was crazy,” Wayne says.
“I held viewings of multi-dwelling complexes in Molonglo Valley, Throsby and Northbourne Precinct, and even the midweek exhibitions and the long weekend – normally very quiet – were hectic.
“I would say we saw quadruple the usual volumes.”
Wayne says properties such as De Burgh – an apartment development where buyers can exchange off-the-plan contracts for $5000 – are being snapped up by first home buyers, particularly “switched-on” single women and young couples.
“It’s really good to see demographics that are often locked out of the market now able to gain a foothold,” Wayne says.
Townhouses and one-bedroom apartments in particular have seen a surge in popularity. Wayne says family-sized townhouses valued from $680,000 to $830,000 and one-bedroom apartments valued from $380,000 to $500,000 are leading the charge.
Wayne, who has sold half a dozen such properties in the past fortnight, says parents with adult children are playing a big role in supporting first-time buyers – and not always with the bank of mum and dad.
“A lot of parents are coming along with their adult children, encouraging them on the journey,” he says.
“They’re supportive of their kids getting into the market and I’ve heard a lot of them share stories about the kinds of places they bought to break into the market back in the day.
“Your first property isn’t necessarily your dream property or forever home – smart first-time buyers know that.”
Recent Cotality data showed while changes to the scheme helped buyers leap the deposit hurdle, the trade-off of a 95 per cent loan-to-value ratio added tens of thousands in extra interest over the life of a 30-year loan.
But with the median weekly rental value across Australia’s combined capital cities now sitting above $700 per week, getting in sooner rather than later – even with a smaller deposit – could still offer significant financial benefits for buyers.
If in doubt, speak to your mortgage broker.
“If you’re wondering what lower deposits and lower rates ultimately mean for you, ask them to break it down,” Wayne says.
“From experience, most first home buyers don’t look at the 30-year implications of interest. They worry about one thing – ‘Can I afford the weekly, fortnightly or monthly commitment?’.
“Ultimately, if they can afford it, and it’s what they need to do to get in, then they’re jumping in.”
For more information, contact Civium.
