Melbourne’s stage four lockdown has put the brakes on first-home buyers at housing estates within the space of two weeks. Despite many continuing to work and purchase during earlier lockdowns, they have taken a “step back” from buying house and land packages this month, new data shows.
The figures from Oliver Hume show a three-month surge in first-home buyers, going from about half of the market for housing estate sales in the first four months of 2020 to about 60 per cent in May, June and July. However, preliminary figures for the first two weeks of August show they have dropped back to half the market again.
Oliver Hume national head of research George Bougias said while the $25,000 HomeBuilder grants had stimulated a lot of activity in June and July, younger buyers now appeared more reluctant to make property moves.
“A number have worked through COVID-19, and the first-home buyers came back strongly in June and July,” Mr Bougias said.
“But this lockdown has put everything on pause. First-home buyers took a step back in the first weeks of August, though that is just from the first 10 days.”
Despite the subsequent reduction in activity, the initial 10 per cent uptick in response to HomeBuilder and rumours of government stimulus during May was important, Mr Bougias said.
“That’s a big rebound,” he said. “It’s obvious there’s been an impact, it’s very rare to see such a swing.”
Blueways Group development director Andrew Wyatt said inquiry quadrupled at their Melbourne estates following the announcement of HomeBuilder. While it still remained at double normal levels, less were proceeding to a purchase.
Mr Wyatt said since the stage four lockdown, developers had begun more proactive searches for prospective buyers, including reconnecting those who pulled back from a purchase last year, in hope additional federal money would bring them back into the market.
TJ White’s Finance Services lending manager Matthew White said the correlation between the $25,000 grants being announced and demand from homebuyers had been “uncanny”.
“First-home buyers, if their income isn’t affected, are happy to get involved,” Mr White said.
Despite this, 90 per cent of those contacting his firm at the moment were refinancing, with only those who had already been in the process of buying a home continuing to seek new housing finance at the moment. Banks had also implemented more stringent checks to confirm prospective borrowers were working as they were pre-lockdown and not just being paid JobKeeper to remain on standby.
“If the cafe you work for is shut down, regardless of whether you are being paid, then you have been affected and that will affect some loan applications,” Mr White said.