‘First home buyer frenzy’: $100,000 jump in six weeks – realestate.com.au

Prices for basic two-bedroom apartments in Brisbane have passed $1 million, rising by $100,000 in weeks since the extension of the federal government’s five per cent down payment program – fueled by a first homebuyer frenzy.

The Real Estate Buyers Agents Association of Australia (REBAA) has reported a “frenzy of buyer activity” since the announcement of the Home Guarantee Scheme expansion on October 1, with the price of some units increasing by $100,000 in just six weeks.

Agents on the ground are reporting a particular spike in interest – and price – for two-bedroom, one-bathroom apartments, which were once overlooked because they weren’t big enough.

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“If you said to me 12 months ago, ‘I’ve got one bed, one bathroom, one car, what’s that worth?’ I’d probably say around $700,000,” said Ben Lobie of Rissman Property.

In recent weeks he sold one in James Street, New Farm, for $920,000, one in Kent Street for $955,000, and recently sold one in Moreton Street without a balcony and not renovated for $1.01 million.

Another two-bed cabin in Pidgeon Close, West End, sold for a whopping $1.15 million in October.

This two-bedroom unit in Pidgeon Close, West End, has just sold for $1.15 million.

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“It’s because the type of buyers for this has changed now,” he said. “Instead of an investor buying, this is someone’s house. You see younger couples who look like they had breakfast on James Street, coming to open houses and now they are buyers.”

The scheme removes location and income limits and increases property price ceilings, allowing more first home buyers to enter the market with a five per cent deposit and no Lenders Mortgage Insurance.

Mr Lobie said investors were now selling out, aware of the opportunity to make money, and first home buyers were stretching their budgets to get into the market.

A two-bedroom, one-bathroom unit in this complex in James St, New Farm, recently sold for $920,000.

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“Two years ago, these buyers would have said, ‘No second bathroom doesn’t work for us,'” he said. “Now it’s, ‘I’ll take the lifestyle as a thank you and worry about it later when I have kids.’ “It’s like a tap is turned on. They buy with confidence, but they stretch themselves.”

REBAA president Melinda Jennison said prices for units and townhouses in some Brisbane complexes had risen by $100,000 in the past six to eight weeks as buyers panicked about the scheme’s impact on the wider market.

“Our team has seen prices that completely blow our minds, especially in the condo and townhouse markets,” Ms. Jennison said.

“Properties that would previously trade in the mid-$600,000s are suddenly trading in the high $800,000s – it’s alarming.

“These are entry-level apartments that no one wanted to buy five years ago.”

Ms Jennison said the “rapid price escalation” since the scheme’s expansion was announced was more surprising than expected, with all kinds of buyers flooding the market – and not just first home buyers.

“And it’s not just some random buyer reaching out to buy,” she said. “These properties are selling with sometimes more than 15 to 20 offers.”

Melinda Jennison, president of the Real Estate Buyers Agents Association of Australia. Photo: supplied

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Ms Jennison said buyers should ‘calm down, stick to their budget and seek expert advice from professional buyer’s agents’ to ensure they don’t overpay for fear of missing out.