Why an oversupply of apartments is a win for Brisbane’s first-time buyers

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It’s no great secret that property in Brisbane is miles cheaper than in Sydney and Melbourne, where young people are increasingly being pushed out of the market by soaring prices and, in Sydney’s case, soaring rents too.

Those already in the property market are quick to offer advice on how first-home buyers can get their financial lives in order, like ditching cafe breakfasts. Not surprisingly, that approach is poorly received.

But in Brisbane, the prospects are much better.

Domain Group chief economist Andrew Wilson previously identified Taigum, Runcorn, Zillmere, Wynnum West, and Acacia Ridge as suburbs within 15 kilometres of the CBD where first-home buyers have a fighting chance.

He places the average first-home buyer’s buying power at roughly $350,000 (with a 20 per cent deposit) ??? and those suburbs all have medians at or near that figure.

In Melbourne, you’d have to go 18 kilometres out to find a median price below $400,000 (Dallas) and Sydney isn’t even worth mentioning.

Dr Wilson said relatively low apartment prices due to the oversupply in the Brisbane market gave first home buyers a brilliant opportunity to get a foot in the door of the property market.

One and two-bedroom apartments in the greater Brisbane area have medians of $310,000 and $387,000 respectively.

“I think it’s interesting when we look at those breakdowns,” he said. “Prospects are good.”

As the number of new apartments entering the market begins to fall, the dive in prices also starts to level out ??? and buyers have taken notice, Dr Wilson said.

“Given there’s some early signs that that market is getting soaked up, value buyers are beginning to get into apartments in Brisbane,” he said.

Just three kilometres from the city, DevCorp development Lincoln on the Park is offering one bedroom apartments for as little as $376,000.

But in order to stand out in a crowded market, they’re also offering an incentive, just for first-home buyers: get the $20,000 government grant and they’ll match it dollar-for-dollar.

“It was a unique opportunity to be able to match the government grant,” DevCorp director Toni Thornton said. “I look at the support we’re offering to first home buyers and if the economy improves I don’t think we’d get an opportunity to do something like that again.”

Dr Wilson said different developers offered different incentives, so it was worth shopping around for the right deal.

Ms Thornton said first-home buyers also had different options available to get a leg up: “There’s mortgage bonds, they used be used a lot on the old days,” she said. “Parents can actually just guarantor your deposit, too.”

House and land on Brisbane’s fringes is selling well and offers an alternative for buyers looking to get into the market Dr Wilson said.

“It’s right around Brisbane, there’s been a lot of development for affordable house and land,” he said. “There’s plenty of choice but the further out, the bigger the properties.”

QM Properties developed several estates in South East Queensland; marketing manager Judi Granic said she’d seen strong interest from first home buyers in all of the developments, particularly the Caboolture house and land packages. 80 per cent of sales in the Central Springs development in Caboolture were to first-home buyers.

House and land was popular enough that it sold without incentives, Ms Granic said.

“I know other developers offer deals, but we’re not doing anything like that,” she said. “We’ve been getting such amazing feedback from first-home buyers that we haven’t felt the need to provide those packages.”

QM Properties’ prices start at $320,000.

Mrs Thornton believed first-home buyers should take any opportunity they can to enter the property market. She said the more time spent in the market, the more you get out of it, but that doesn’t mean rush into buying.

“It’s a critical decision,” she said. “Not only [should you buy] somewhere you’d like to live but something that’s going to stand the test of time.”

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