In Victoria, FHB’s are currently able to pay no stamp duty if buying property up to $600k phasing out up to $750k. Recent figures show they are buying a lot more property than before all the additional Government incentives were made available. In Melbourne, there are 37% more over the last 8 months than the 8 months prior (24,000 vs 17,500).
But many are hesitant to buy due to the market cycle having peaked in about September last year. The thinking is, if it’s dropped a little already, maybe it might drop some more. So, we’d better wait and see before committing. This is likely to be seen as a mistake when we look back on it in a year or two.
Quite simply, markets don’t move uniformly. For instance, whilst general prices published recently by the Real Estate Institute showed middle Melbourne prices moving up by about 4.2% for the March quarter, in the Eastern suburbs within the vicinity of our office, prices were about 4% lower for the quarter. Likewise, whilst prices have generally softened, this has mostly related to development sites and more expensive homes. Those in the cheaper range have held up and even increased.
This isn’t particularly surprising as a lot of the slowdown is as a result of affordability. There is a reason that Hobart is the best performing city in Australia for the last 3 years; it’s cheaper and more affordable. So, if you are a FHB, don’t wait for prices to drop; if possible, buy when you can afford to whilst there is a slowdown. Waiting is a bit of a mugs game. History indicates those that do usually have huge regrets.