I had dinner with an agent this week — a young woman in her twenties selling units in the Eastern Suburbs of Sydney.
We were discussing the cost of one-bedrooms apartment which she had recently sold or was currently negotiating.
The prices of these ranged from $1 million to $1.7 million!
When I asked her what was the main demographic of buyers, she said it was singles or young couples her age — say what?!
Oh and for the record, these units were roughly all less than 50sq m, without harbour or city views and some without car parking spaces.
In a week when the budget announced measures to help first home buyers enter the market, I genuinely hope they’re not trying to push them into these areas.
Most of the country is offering great value, but these inner city markets of Sydney and Melbourne are not the place for a first homebuyer to be dipping their toes.
To give you some comparison you could do a search of properties listed in Brisbane’s CBD and find one-bedroom units for less than $200,000 or even in New Farm in the $200,000s.
I completely understand the population benefits of Sydney, but is Brisbane really only 20 per cent (or less) of their price?
Fortunately, the budget does seems to have a plan to steer these first home buyers into the markets that are not overstimulated.
There is a provision in the budget that extends the powers of APRA, which can dictate to the banks on some of the lending criteria for certain suburbs.
This could likely mean the banks will be restricted on the amount of money they can lend in these bull markets.
I believe this and the levies applied to foreign investors, if used in the spirit of the budget, could slow these super fast markets.
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