Prices for basic two-bedroom units in Brisbane have surpassed $1m and risen by $100,000 in a matter of weeks since the expansion of the federal government’s five per cent deposit scheme — fuelled by a first homebuyer frenzy.
The Real Estate Buyers Agents Association of Australia (REBAA) has reported a “frenzy of buyer activity” since the announcement of the expansion of the Home Guarantee Scheme on October 1, with the price of some units surging by $100,000 in just six weeks.
Agents on the ground are reporting a particular spike in interest — and price — for two-bedroom, one-bathroom apartments that were once overlooked for not being big enough.
A two-bedroom unit in this complex in Moreton St, New Farm, sold in October for $1.001m.
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“If you said to me 12 months ago; ‘I’ve got a two bed, one bath, one car, what’s it worth?’, I’d say probably around the $700,000 range,” Ben Lobie of Rissman Property said.
In the past few weeks, he sold one in James Street, New Farm, for $920,000, one in Kent Street for $955,000, and recently sold one in Moreton Street with no balcony and unrenovated for $1.01m.
Another two-bedder in Pidgeon Close, West End, sold in October for a staggering $1.15m.
This two-bedroom unit in Pidgeon Close, West End, just sold for $1.15m.
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“It’s because the types of buyers for these have changed now,” he said. “Instead of an investor buying…this is someone’s home. You’re seeing younger couples who look like they’ve had breakfast at James Street coming to open homes and they’re now buyers.”
The scheme removes place and income limits and raises property price caps, enabling more first home buyers to enter the market with a five per cent deposit as well as no Lenders Mortgage Insurance.
Mr Lobie said investors were now selling out, realising the opportunity to cash in, and first homebuyers were stretching their budgets to get in to the market.
A two-bedroom, one-bathroom unit in this complex in James St, New Farm, recently sold for $920,000.
“Two years ago, these buyers would have said; ‘No second bathroom doesn’t work for us,” he said. “Now, it’s; ‘I’ll take the lifestyle thanks and worry about that later when I have kids’. “It’s like a tap that’s been turned on. They’re buying with confidence, but they’re stretching.”
REBAA president Melinda Jennison said prices had jumped $100,000 for units and townhouses in some complexes in Brisbane in the past six to eight weeks as buyers started to panic about the impact of the scheme on the wider market.
“Our team has seen prices that completley astound us, especially in the unit and townhouse market,” Ms Jennison said.
“Properties that previously would have transacted for mid-$600,000 are all of a sudden transacting in the high $800,000s — it’s alarming.
“These are entry level apartments that five years ago no one wanted to buy.”
Ms Jennison said the “rapid price escalation” since the announcement of the expansion of the scheme had been more surprising than expected, with buyers of all types flooding the market — not just first homebuyers.
“And, it’s not just one random buyer stretching to buy,” she said. “These properties are being sold with, sometimes, in excess of 15 to 20 offers.”
Real Estate Buyers Agents Association of Australia president Melinda Jennison. Photo: Supplied
Ms Jennison said buyers needed to “calm down, stick to their budgets, and seek out expert advice from professional buyers’ agents” to ensure they did not overpay because of a fear of missing out.
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