Homing in on the cheaper suburbs

Homeowners in suburbs popular with first-home buyers could be sitting on a jackpot without even realising.

REA chief economist Nerida Conisbee.

Homeowners in suburbs popular with first-home buyers could be sitting on a jackpot as some locations in smaller and stable capitals cities face a shortage of properties due to heightened demand.

First-home buyers are currently the driving force in the property market, accounting for more than a third of the market.

New data from property portal realestate.com.au, comparing the number of properties for sale to the same time last year, shows Caboolture in Brisbane’s north currently has the biggest shortfall of available properties in the country.

The cheaper entry point to the market is attracting a huge number of inquiries from hopeful ­buyers.

REA chief economist Nerida Conisbee said the main thread running through the list of popular suburbs was a low price point for established property and new housing sites.

“First-time buyers are very powered up at the moment,” she said.

“They’ve got access to the 5 per cent deposit scheme, a lot of state government incentives, record low interest rates, access to funding has been eased, so there’s all these things to help these buyers.

“That is leading to a property shortage in some of the more popular locations.”

Other in-demand suburbs starting to run out of properties include Baldivis and Mandurah in southern Perth, Wollert, Cranbourne East and Clyde North in outer Melbourne, and Gregory Hills in outer Sydney.

The impact of Australia’s short-lived COVID-19 recession was also put under the microscope.

It found the price of detached houses held steady or dipped slightly in all capital cities, with pent-up demand keeping the market afloat.

In the two major housing markets of Sydney and Melbourne, detached property prices fell 0.6 per cent and 0.8 per cent respectively since the start of the pandemic to date, with the change occurring between March and May.

Darwin and Hobart were the only other capital cities affected, dipping 0.2 per cent and 0.1 per cent respectively through April, while all other cities and regions held steady.

Ms Conisbee said the analysis was largely unsurprising given the strong financial position of Australia’s financial and banking sector before the pandemic.

Potential job losses in the inflated Sydney and Melbourne markets is one of the drivers Ms Conisbee attributes to the largest falls in the capitals, with many homeowners having the option to sell early.

She noted that Sydney was turning into a two-speed market, with cheaper lower-socio-economic areas such as southwest Sydney continuing to fall while the leafy Northern Beaches were rising.

“It does tend to be the far wealthier areas less impacted by COVID restrictions in terms of job loss and, in many ways, people in those areas had more money during the pandemic because they had nothing to spend it on,” she said

“So as a result, we didn't see quite the dire pricing conditions in those locations.”

Canberra’s housing market was held up by high levels of government employment, while the swift health response in Perth compounded with the end of the downturn to create sustained growth through winter.

The house price recovery appears entrenched, with property prices rising in all capital cities through November.

It was a different story in the unit market.

Six of the eight capital city markets recorded price falls between March and November, with the exceptions being Darwin and Hobart.