Landlord Retreat Opens Door for First-Home Buyers

First-home buyers remain the most active buyers in the nation, according to new research, with a slowing in residential investment a suggested motivation.

The CBRE Residential Valuer Insights reports for the third quarter of this year canvassed residential valuers, who noted that first-home buyers were the most active group.

This continued the trend of the first and second quarter of 2024 with the majority of the first-home buyers based in metropolitan Melbourne, the Gold Coast and Sunshine Coast. 

CBRE Pacific research head Sameer Chopra said it made sense in terms of recent state policy changes in Victoria.

“It’s not surprising to see demand from first-home buyers remains robust nationally,” Chopra said. 

“The recent changes to tax obligations for investors in Victoria is skewing demand towards first-home buyers in Melbourne.”

The Victorian Government raised the land tax rate and cut the tax-free threshold from $300,000 to $50,000, which, according to reports, has triggered a landlord retreat and freed up homes for owner-occupiers. 

The surveyed valuers also expect Perth and Adelaide will record the strongest house price growth with demand high in both cities as well as metropolitan Brisbane. 

The survey found greater confidence across the second quarter when 70 per cent of respondents expected increased house values in 2025. 

About a third predicted modest price growth of up to 5 per cent for houses. 

Apartments caused divided opinions with 44 per cent expecting an increase in value over the next year and 41 per cent expecting prices to be stable.

▲ Piety Group’s The Halston apartments at North Strathfield—valuers remain divided on whether apartment prices will increase or remain stable.

The highest price growth was expected in Perth, Brisbane Metro and Brisbane Outer Metro. 

CBRE residential valuations national director Kat Hale said seasonal change may increase activity. 

“As we head into spring, we’re anticipating increased listings nationally,” Hale said.

“While demand to purchase has remained strong in Perth, Adelaide and Brisbane Metro, we are seeing softer demand in Melbourne and Canberra.

“Buyers are still preferring new or recently renovated properties, with less demand for properties in secondary locations.”

Meanwhile, Housing Australia reported that during 2023-2024, the Home Guarantee Scheme supported 34 per cent more buyers to purchase or build a home than in the previous financial year.

It also found that there was an increase in the number of key workers and regional Australians participating in the scheme. 

About a third of first-home buyers were supported by the scheme with 43,800 places taken up. 

That included more than 18,000 regional Australians with 13,000 of them accessing the Regional First Home Buyer Guarantee. 

Surveys carried out showed that 42 per cent of those individuals moved to owning a home after renting in regional areas for two years or more.

▲ About 13,000 regional Australians used the Regional First Home Buyer Guarantee after renting regionally for two years on average.

More than 11,300 key workers took up home ownership in 2023-2024. The report said that a majority were nurses, teachers and social workers who were supported by the scheme to live closer to work.

Victoria, Queensland and Western Australia had the highest participation rates in the scheme, with Hoppers Crossing, Craigieburn and Cardinia in Victoria the top-three areas for home buyers. 

Single borrowers paid a median national purchase price of $455,000 and joint borrowers, $600,000 under the scheme. 

Housing Australia’s report also said that almost 20 per cent of home buyers using the scheme had already transitioned out of it after an average of two years within the scheme. 

“Approximately 60 per cent of home buyers who transitioned out of the scheme either paid down the loan to under the 80 per cent loan-to-value ratio, or refinanced to another lender, likely leveraging additional accumulated equity,” the report said. 

Housing Australia home ownership chief program officer Jennifer Chew said this showed the scheme worked as a temporary mechanism towards home ownership. 

“Amid rising living costs and housing affordability challenges, the Home Guarantee Scheme has supported thousands of eligible home buyers to navigate the market and achieve home ownership sooner,” Chew said. 

“The strength of the scheme is further demonstrated by the number of participants that have transitioned out of the Scheme due to equity built up.”