The housing market has shown a robust performance, despite the shock of Covid-19 which has created new opportunities for buyers.
The pandemic has impacted pockets of the housing market, where median values have dropped below the first home loan deposit scheme thresholds.
Recent housing value declines are particularly prominent in major cities like Sydney and Melbourne.
These cities accounted for around 75 per cent of international migration across the capital cities in 2018-19, meaning international border closures have created a particular demand shock.
On Wednesday, the minister for housing announced around 1,800 places would be re-issued from the first round of the first home buyer scheme.
This means recent value falls may have created an opportunity for first home buyers, where there is a maximum purchase price cap to qualify for the scheme.
As of January 2020, there was an average of 1071 suburbs observed in the capital cities with a median value at or below the qualifying threshold, assuming the application is for established property.
Established property has historically been favoured by first home buyers where benefits for both new and established property have been available.
That was further demonstrated in the slower utilisation of the scheme when it was made available for only new property.
Corelogic median dwelling value data reveals city suburbs where the median value fell below the established property price threshold since the onset of Covid.
This effectively looks at the change in the median value of all houses or units across a suburb between March 2020 and January 2021.
Note suburbs analysed include where Corelogic has high confidence in the median value, and there have been at least 50 transactions across the suburb over the past 12 months.
| Suburbs that Qualify for First Home Buyer Scheme | |||
| Suburb | City | Median Value Jan 2021 | Median Value Mar 2020 |
| Kellyville | Sydney | $675,785 | $747,661 |
| Rouse Hill | Sydney | $638,755 | $726,900 |
| Arncliffe | Sydney | $690,441 | $721,626 |
| Hurstville | Sydney | $651,924 | $716,943 |
| Ashfield | Sydney | $689,884 | $717,949 |
| Strathfield | Sydney | $688,341 | $746,239 |
| Wentworth Point | Sydney | $686,114 | $715,019 |
| Gladesville | Sydney | $698,034 | $751,558 |
| Ryde | Sydney | $678,719 | $714,899 |
| Caringbah | Sydney | $679,373 | $717,427 |
| Kirrawee | Sydney | $671,313 | $707,328 |
| Balaclava | Melbourne | $598,36 | $618,291 |
| Brunswick | Melbourne | $579,828 | $608,147 |
| Docklands | Melbourne | $575,517 | $616,196 |
| South Melbourne | Melbourne | $596,486 | $645,924 |
| St Kilda East | Melbourne | $579,514 | $613,683 |
| Thornbury | Melbourne | $584,288 | $611,704 |
| Ferntree Gully | Melbourne | $576,076 | $600,439 |
| Beaconsfield Upper | Melbourne | $573,562 | $601,703 |
| Clayton | Melbourne | $570,988 | $636,567 |
| Oakleigh | Melbourne | $575,210 | $628,533 |
| South Brisbane | Brisbane | $468,672 | $483,277 |
| Munster | Perth | $397,318 | $446,353 |
The list comprises 23 suburbs across the four largest capital cities.
In each of the suburbs, it is unit medians that have slipped below the threshold.
Unsurprisingly, six of these include unit values in the Melbourne–inner region, where median values have declined an average – $33,313 between the onset of the pandemic and January.
As noted in previous research, the inner region of Melbourne has seen particularly severe declines in rent and property values since the onset of the pandemic.
This is because the Melbourne-inner region has historically had particularly high exposure to housing demand from overseas migrants, such as international students, as well as people employed in tourism, hospitality and the arts.
Both cohorts have been particularly affected by the pandemic.
The same trends may explain the decline of median unit values in South Brisbane, where inner city Brisbane has also seen relatively high levels of overseas migration as a component of population growth.
While the impacts of Covid on some markets has seen a decline in values, upward pressure on prices may result from the resumption of interstate and international travel, as well as continued improvements in the Australian economy.
As more of the housing market is caught in a broad-based upswing, first home buyers could face more challenges getting into the market in the year ahead.
Data Source: theurbandeveloper.com
Deposit Scheme (FHLDS) is an Australian Government initiative to support eligible first home buyers to build or purchase a new home sooner. The Scheme is administered by the National Housing Finance and Investment Corporation (NHFIC). Usually first home buyers with less than a 20 per cent deposit need to pay lenders mortgage insurance. Under the Scheme, eligible first home buyers can purchase or build a new home with a deposit of as little as 5 per cent (lenders criteria apply). This is because NHFIC guarantees to a participating lender up to 15 percent of the value of the property purchased that is financed by an eligible first home buyer’s home loan.
