First-time home buyers who are looking to purchase in Sydney may be disappointed by the prohibitive prices and lack of available housing currently within the market. Soaring prices and competitive real estate investors have made it difficult to secure a property.
It's An Investors Market
For first home buyers, investors are posing a major problem as they are acting quickly and willing to pay slightly more for a property. Moreover, they tend to have more flexibility when it comes to their finances.
Investors who are already established within the housing market can easily gather the capital to secure a down-payment and get through the loan approval process without having real estate snapped up from under them. Today, only 12.5 percent of buyers are first-time buyers - significantly lower than the long-term average of 20 percent.
Reasons For a Tough Market
Why are first-time buyers being pushed out of the Sydney real estate market? As mentioned above, saving up for significant down-payments is a major barrier to entry. In addition, the expiration of government assistance programs that offered first home owner grants to first-time buyers has also influenced the current market climate.
Soaring prices make it more difficult for first-time buyers to afford a home. Sydney home prices are continuously increasing each month. Prices increased 2.5 percent in September and another 2.4 percent in October.
First-time buyers who can afford real estate in Sydney may not be able to compete with aggressive investors. Some investors are bidding well over the offers made by first-time buyers which make it extremely difficult and stressful for them to secure their dream of home ownership.
A Warning For First-Time Buyers
One trend that has emerged as a result of the competitive real estate market in Sydney is an increase in the debt load of the average household. It is advised that first-time buyers avoid taking on more debt than they can afford.
The Sydney real estate market is crowded and competitive with soaring prices still causing major issues. The best advice for first home buyers is to be prepared, so that when opportunity strikes you're ready to proceed and sign off on the house quickly. Consult with a mortgage broker to gain pre-approval prior to shopping for a home. The fast-paced, competitive Sydney real estate market can be easier to negotiate for first home buyers if they work closely with a broker to quickly obtain financing when homes become available.