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Tight supply and fierce competition have made it more challenging for first home buyers in South Australia to secure a property.
Following South Australia’s first home owners scheme and full stamp duty exemption, the market has toughened up for first-time buyers as demand and prices hit record highs.
In South Australia, eligible first home buyers can benefit from a $15,000 First Home Owner Grant and a full stamp duty exemption for purchasing or building a new home.
Think Mortgage director Kapil Virmani said that, despite generous incentives, first home buyers in South Australia have been facing their most challenging market in years.
“Four years ago, a home that would’ve cost $750,000 or $800,000 is now going for $950,000. That’s a big jump, and many buyers simply can’t stretch that far,” Virmani said.
He said that since the government expanded its stamp duty relief and grant eligibility, demand exploded while supply faltered.
“Since the changes came in, interest in new homes has skyrocketed. But the supply just isn’t there, especially under $900,000 – and that’s where most first home buyers are trying to get in,” he said.
Virmani said builders’ response to the market has been to increase prices, which has left many first home buyers in the dust.
“They are asking for higher prices and, in most cases, they’re getting them,” he said.
Virmani warned that South Australia urgently needs more housing supply, noting the state underestimated the surge in demand after new incentives and must accelerate land releases and approvals.
“The builders I speak to have so much work lined up that they could stop taking new jobs today and still be busy for the next two to three years. That’s how extreme the demand is.”
First home buyers in South Australia have been on the market for months, with property being snatched off-market by buyers ready to pay extra to secure the deal.
He urged first home buyers to remain patient, build relationships with local agents, be paperwork-ready and make strong offers upfront, rather than trying to negotiate down.
“You might only get one shot at a property. If it’s the right one, don’t hold back. Missing out over $1,000 could cost you your dream home,” Virmani concluded.
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