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First home buyer properties lead October housing surge
Lower-priced homes within the First Home Buyer Guarantee price caps led Australia’s property gains in October, outperforming higher-value dwellings nationwide, with Darwin and Sydney recording the strongest growth.
In October, dwellings under the First Home Buyer Guarantee (FHBG) price caps rose 1.2 per cent nationwide, 22 basis points higher than those above the cap, which grew just 1 per cent, according to Cotality data.
Across asset classes, houses priced within the scheme limits outperformed units, climbing by 1.3 per cent nationally, while units rose by a more modest 1 per cent.
Cotality head of research, Eliza Owen, said that while lower-value properties typically outperform those in the higher price range, the growth difference in October was high compared to other months.
According to historical data, October’s growth ranked in the 84th percentile compared with all months since December 2009.
Capital city markets
Across the country, properties in Darwin saw the highest capital city growth, with dwellings under the $600,000 cap rising by 2 per cent, while those above the cap grew by 1.3 per cent.
Owen said the outperformance of lower-end homes in Darwin may be explained by increased investment activity.
Sydney houses recorded the second-highest growth among capital cities, with properties under the $1.5 million price cap rising 1 per cent and those above it up 0.5 per cent, putting the city in the 88th percentile for the month.
The data showed that high-value regions also contained lower-priced pockets such as Melbourne and Perth’s inner suburbs and North Brisbane, which saw value rise between 1.7 and 1.9 per cent.
Comparatively, properties above the price cap in these same areas grew by 0.4 and 1.3 per cent.
While properties that lie within the FHB scheme’s price ranges outperformed the rest of the market in almost all capital cities, Canberra and Hobart were the only exceptions.
Dwellings above the upper price limit in Canberra grew by 0.7 per cent over October, outperforming the 0.4 per cent growth seen by the city’s more affordable options.
Hobart saw similar results, with dwellings ineligible for the FHBG outgrowing those available to first-home buyers, resulting in a 0.4 per cent increase compared to a more modest 0.2 per cent rise.
Regional markets
In regional markets, Western Australia saw the strongest growth in properties beneath the cap, rising by 2.1 per cent.
Victoria, Queensland, and South Australia all saw properties under the price limits grow by between 0.8 and 1.3 per cent, while NSW grew by a flat 1 per cent both above and below the cap.
Popular regional centres, such as Geelong and Wide Bay, have also seen properties under the First Home Buyer price caps significantly outperform those above the limits, surging from 0.6 to 1.2 and 0.4 to 0.9, respectively.
Owen said the growth trends indicate that values had been climbing in the months before the expansion of the 5 per cent deposit scheme.
“Ultimately, the expansion of the 5% Deposit scheme is one of many factors influencing strong growth at the lower-to-middle end of the market.”
“A causal relationship is difficult to establish, but it is useful to have this perspective.”
“It is also worth noting that it might be too soon for the full impact of the expanded scheme to show up in price growth,” Owen concluded.