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Twice the Demand: First-Home Buyers Flock to Melbourne
Melbourne has been attracting significant interest, with twice as many first-time buyers as the rest of Australia and four suburbs featured among the nation’s top five hotspots for new owners.
While agents nationwide prepare for a surge in first-home buyers, Victoria is set to see an even bigger spike, with Melbourne emerging as the most popular capital city for new buyers.
New data have shown that Melbourne is overwhelmingly popular among first-home buyers, offering more affordable housing as dwelling prices across Australia continue to rise.
The most recent PropTrack and Commonwealth Bank First-Home Buyer Report has revealed that Melbourne has become a highly sought-after city for first-home buyers, ranking fourth among the nationwide top five first-home buyer hotspots.
The favourite suburbs included Maroondah, Brimbank, Casey’s north, and Knox.
Further, of the 20 top first-home buyer hotspots across the country, nearly half are in Melbourne’s outer suburbs.
Additionally, Victoria’s capital recorded almost twice as many first-time buyers compared to the rest of Australia.
The preference for Melbourne has also been seen in lending data from the Australian Bureau of Statistics, as Victoria recorded the largest share of new loans going to first-home buyers.
The report said the over-representation of first-home buyers in Melbourne is consistent with the city’s relative affordability compared to other capital cities.
“A median-priced home in Melbourne is now cheaper than in Adelaide, Brisbane or Perth, following very strong growth in those cities over the past five years,” it said.
“While this in part reflects differences in the types of homes across these cities, even just comparing detached houses in Melbourne to those in Brisbane, the median price is lower.
“It is also consistent with a much higher share of Melbourne homes falling under the price caps for the Federal Government’s Home Guarantee Scheme that have applied over the past couple of years.”
The report also revealed that, despite today’s challenging conditions in the housing market, first-home buyers are still finding ways to purchase their first property.
According to the data, saving for a deposit takes longer than it did for previous generations, and mortgage serviceability is at levels last seen three decades ago.
However, with more first-home buyers in the past year than was typical during the 2010s, they have numerous options available to assist them in starting their property journey.
“Taking advantage of government grants, low-deposit schemes, and Lenders Mortgage Insurance can enable first-home buyers to overcome the deposit hurdle and buy sooner,” the report said.
“Buying newly built or ‘rentvesting’ are also strategies some are implementing to overcome challenging affordability,” it concluded.