First-home rush sparks shock price surge ahead of deposit scheme

First-home buyers Ethan Wallis and Pieter Dell are part of a surge of young Aussies rushing to get into the market

Aussie home prices have jumped by up to $50,000 in the past month, with panic buying sweeping the market as the Federal Government’s expanded Home Guarantee Scheme takes effect.

The scheme, which kicks off Wednesday, removes place and income limits and raises property price caps, allowing more first-home buyers to enter the market with a five per cent deposit and no Lenders Mortgage Insurance.

But Real Estate Buyers Agents Association of Australia (REBAA) president Melinda Jennison said the changes had already fuelled a frenzy.

Melinda Jennison of the REBAA has urged buyers to stay calm. Supplied

“Properties that were selling for $750,000 last month are now selling for close to $800,000,” Ms Jennison said.

“Many buyers are reportedly panicking with some purchasing sight unseen or overpaying to secure a property before October 1.”

She warned that while the scheme would help more young Australian onto the property ladder, without a boost in housing supply prices would continue to soar.

“What was $800,000 will soon be $900,000, which will make it even more difficult for first timers to secure finance for a home – even with the scheme’s five per cent deposit on offer,” Ms Jennison said.

This Carindale, Qld home was snapped up at auction within seconds

“Markets are already in frenzy, let alone what the next few months will bring once the scheme has started.

“Property buyers need to calm down, stick to their budgets, and seek out expert advice from professional buyers’ agents to ensure they don’t overpay because of their fear of missing out.”

REBAA state representatives reported similar conditions nationwide:

Frenzied conditions were reported in every state

NSW: queues at inspections and record-setting sales, according to Linda Johnson.

Victoria: heightened demand for sub-$900,000 units and townhouses in the inner and middle rings, said Matt Scafidi.

Queensland: offers sight unseen and rapid sales in the $650,000–$800,000 bracket, said Melinda Granzien.

WA: listings down 25 per cent since July, with up to 20 offers on sub-$750,000 homes, said Peter Gavalas.

SA: expanded eligibility has almost doubled the number of suburbs within reach of first-home buyers, said Jess Elam.

Tasmania: buyers active in the $500,000–$550,000 bracket, with land size a key priority, said Samantha Spilsbury.

Investors and first-home buyers were in the mix for hotly contested family homes

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Ms Johnson said NSW properties had been hotly contested, with both first-home buyers and investors in the mix for well-located, entry-level priced family homes.

“The onset of this competition has driven prices to set new records in some areas and shortened days on market,” she said.

“In some markets, there has also been a flurry of new listings at the lower end. An

element of FOMO and panic is in the air, with emotions running high.

“We expect this to heighten further from 1 October.”

Units, apartments and townhouses were poised for strong price growth in Melbourne.

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