First Home Buyers

Reporter: Natalie Bonjolo

They're the young buyers, revving up Perth real estate.

When buying their first place Jordan and fiancé Frankie found themselves in a first home buyer frenzy.

"For first home owners who are getting into the market we just haven't got enough properties at the moment" Here in Ellenbrook Century 21's Christian Smith has an unprecedented number of young buyers on his books. "It's actually caught us off guard because for a number of years we have actually been quiet consistent with the fact people are a bit shy, a little bit not sure about the market"

"The problem first home buyers have got at the moment is stock is diminishing in those cheaper price ranges" President of WA's Real Estate Institute, David Airey says first home buyers are snapping up properties under half a million dollars. "The ceiling is $500 000 because you get free stamp duty up to $500 000 and that's definitely what first home buyers want" Creating a major problem in supply and demand.

"So first home buyers are actually competing against each other and also against property investors to buy cheap stock"

Jordan and Frankie snared this roomy four by two in Ellenbrook for $385 000. "When we were looking at inner city suburbs the houses we were looking at in this price range were horrible you would need to put an extra $50 000 to $100 000 to renovate to a liveable standard" The deal sweetened by a big backyard and all in their price bracket. But with interest rates on hold, and rental prices hitting an all-time high now $450 dollars a week, more first home buyers are taking the plunge. David Airey says "younger people particularly are prepared to take the risk rather than stay on the rent cycle"

First home buyers usually account for 1 in 4 property sales that's now increased, with 1 in 3 of every homes sold going to a first home buyer.

David Airey says "of those first home buyers 7 out of 10 of them are buying established homes."

So what are the hottest selling suburbs for first time buyers?

Number one is Baldivis

David Airey says "Baldivis is more recent success story largely due to the railway transport available in the area"

Also in the top five Byford, Thornlie, Forrestfield and Ellenbrook.

Christian Smith says "the most amazing thing that first home buyers can get into the market especially in this area is they can get in for under $400 000"

The median price across Perth is $480 000 dollars, for first time buyers-- it's $80 000 less, they're paying a median price of $400 000.

And it's buyers like Jordan and Frankie expected to help kick start the rest of the market.

When a first home buyer gets into the market that means the owner is probably trading up and that owner of that place, trading up too on and on until it starts again. When the first home owner becomes a second time buyer. David Airy says "without them buying the cheaper stock you would not have that trade up cycle happening at all in the market" and that can only be good news for home owners, hoping to sell.

In the past quarter the top five performing suburbs have been Medina, South Perth, Floreat, Kallaroo, and top seller Ascot, which has seen a seven percent increase in the median price, to just under $850 000 dollars.

As for the top end of the market sales aren't yet catching up. "If your property is over 1 million your probably facing over 100 days to sell it"

While first home buyers are putting a spark back into the market it's not about to create a boom just a bit more balance.

Further Details

www.reiwa.com.au