The strong return of first home buyers to the property market has been a welcome turnaround from 12 months ago when affordability was at record lows and first home buyers were struggling to gain a foothold in the market. The outlook is positive for first home buyers and the current conditions are set to remain in place until at least the end of June, when the first home buyers boost is scheduled to end.
Whilst there has been an increased level activity amongst first home buyers other sectors of the market are experiencing challenges. Many agents are reporting a lack of available properties that match the enquires they are receiving from buyers who are looking to upgrade from their existing homes, but are unable to locate a dwelling that fulfils their needs. This is creating an imbalance between supply and demand. This imbalance has seen auction clearance rates jump to around 70 per cent in recent weeks, which is well up on the mid to high 50 percents that was common for most of last year.
The Reserve Bank of Australia meets in early March and in mid-March the latest round of employment data will be released. A cut in interest rates, stability in the job market or a combination of both will provide for further stimulus to the housing sector and an increase demand. It is unlikely that supply will be able to match demand in the short term. The likely outcome is that well presented homes will attract strong interest which is good news for vendors.
