The end of a calendar year is always a time of reflection and taking stock.
For the property market, 2018 may have seen some ups and downs, but there have also been more than a few silver linings – particularly for new developments.
More first homebuyers
As the market has cooled, opportunities for first homebuyers have grown, giving them the best chance in years of becoming property owners.
Nicola Powell, senior research analyst at Domain, has noticed this shift.
“I think particularly for first homebuyers in NSW and Victoria, we have seen an increase in buyer participation,” Powell says.
“They’ve got fewer investors to compete against, they’ve got fewer foreign buyers to compete against, and they’ve got first homebuyer incentives from each state government that is abolishing stamp duty below a certain price point.”
Powell notes that in Sydney and Melbourne, apartments are outperforming houses and aren’t as impacted by price deterioration.
“The desirability of units is certainly growing. We’re seeing buyers drawn to the apartment space due to affordability and being connected,” she explains.
“Units are particularly popular among first homebuyers because you tend to find they’re better connected, they’re better placed in terms of location, closer to the CBD and with a lower price point.”
Changing buyer profiles
Running parallel to the surge in first homebuyers, buyer profiles and their property demands are changing, too.
“There’s certainly a shift in active buyer segments in the market,” Powell agrees.
“We’re seeing it become more of an owner-occupier led market.”
Whereas investors purchase properties based on potential capital growth, owner-occupiers prioritise liveability and a high-quality product.
As such, they look at balcony spaces, number of bedrooms, an apartment’s orientation, and a development’s layout and location. Outdoor and green spaces are also highly sought after.
Increasingly, stock is changing to align with these owner-occupier needs.
Powell says in 2018, the average floor space of new apartments in Queensland, Western Australia, Tasmania and the ACT increased compared to the previous year. Additionally, more new developments are including features such as shared gardens, childcare facilities and supermarkets.
“All of those things that help to create an easier lifestyle for a family,” says Powell.
“Which I think is attractive to that buyer segment.”