Given the changing tide of the property market at present, now may be the best time for would-be First Home Buyers to get on the Sydney property ladder. It seems that many have been putting off taking the plunge and buying their first home, hoping that property prices will drop. However the property price recovery gathered pace in May on the back of increases in March and April, with Sydney continuing to lead nationally. Sydney prices were up 1.8 per cent in the month of May, the biggest gain since September 2021, and up 4.8 per cent from January's low as the number of properties listed for sale falls further.
All the top market forecasters are predicting further rises due to numerous factors and in spite of the interest rate rises, CoreLogic's head of Australian research Eliza Owen states "There are several main factors driving this. We think it is largely the demand from returning overseas migration along with lower volumes of supply.”
Owens goes on to say, “There are also other factors at play such as a really tight rental market, which might be prompting some renters to instead buy if they can afford it, as well as investors potentially looking back to the market as rental income and yields rise as well. And the continued tightness in the labour market, stronger housing demand and the limited supply environment are likely to support an ongoing recovery." With rents increasing as fast and as much as they are, servicing a mortgage is far more comparable to the costs of renting.
Apartment rents are not only surging (up 14.8% over the year to April), they’re growing significantly faster than house rents (8.4%). CoreLogic economist, Kaytlin Ezzy, notes that “The mismatch between [unit] rental supply and demand has seen capital city rental growth reaccelerate, which will be unwelcome news to many tenants.”
Also according to CoreLogic, apartment prices in Sydney could soon outperform houses, driven by the city’s tight rental market and the expected surge in immigration. CoreLogic's research director, Tim Lawless, says “The last time we saw housing values trending higher through a rising interest rate environment was during the mid-to-late 2000s when the mining boom was underway. This period was also characterised by surging net overseas migration that contributed significantly to housing demand.” And Tim Oliver from AMP Capital goes as far as predicting “Prices set to rise 10% this year.”
Michael Yardney Director of Metropole Property Strategists, says “It might be wise for first home buyers to enter the market sooner rather than later, before prices rise further.” He suggests two ways to get added support are the First Home Guarantee with 5% deposit and no Lender’s Mortgage Insurance fees. Also if you have parental support you could obtain a Guarantor Home Loan to enter the market with potentially 0% deposit. Conditions apply so check your eligibility.
And don’t forget the First Home Buyer Land Tax option, where you can opt to pay annual Land Tax instead of Stamp Duty, which will reduce the upfront costs of your property significantly. But do be quick to act, as news just out shows the current NSW Government will abolish this scheme and that it will cease to exist from July 1, 2023. However there is a positive, once this option is removed first home buyers will not have to pay stamp duty when purchasing a property to the value of $800,000.
So if you want to seize the day to get on the property ladder, there’s likely no better place to start than lifestyle developments in areas with great infrastructure and sense of community. The superb, designer apartments in Wicks Place on the Park are located in TimeOut’s World’s Top 10 Coolest Neighbourhoods, Marrickville. With all the incredible cafes, restaurants, artisan shops, bars, craft beer scene and so much more. Get in before they sell out prior to completion which is estimated for late 2023/early 2024. Check out these properties below:
