A Springwood real estate agent says new 5% deposits for first-home buyers will be helpful for those looking to enter the market.
However, he warned it could encourage buyers to spend above their budget and take on a lot of debt.
Last week, the federal government announced it would bring forward 5% deposits for first-home buyers by three months.
From 1 October, first home buyers will only have to put down a 5% deposit, compared to the previous standard 20% deposit, to enter the property market.
“I personally don’t think it’s a great idea to buy an expensive home because the deposit will only be 5%,” McGrath Springwood director Teza Fruzande said.
“There will still be a lot of debt involved in that purchase, and we’re still dealing with economic uncertainty.
Mr Fruzande said he had seen clients sell their homes because they couldn’t pay their mortgage, which was troubling.
He worries a lower deposit rate will lead to more situations like this if buyers take on more debt than they can handle.
“Maybe we won’t feel it now, but we probably will feel it in three or four years time,” he said.
Since May this year, Mr Fruzande said demand from first-home buyers in Logan had increased substantially due to a combination of federal housing policies and steady interest rate cuts.
“When there are more buyers in the market and less stock, the prices always go up. And when there are more properties available, more stock, and fewer buyers, the prices will come down.
“What we’re experiencing now is that there isn’t much stock available on the market, but there are still a lot of buyers who are looking to secure these homes.”
Principal estate agent at Harcourts Underwood, Faziya Day, said buyers had expressed worry about the limited amount of ‘affordable’ properties on the market.
“We’re already seeing conversations with buyers who are expressing a fear of missing out on property ownership, which is fueling demand in this [under $1 million] price bracket,” Ms Day said.
“As competition increases, buyers may need to adjust their expectations to align with the realities of the market, ensuring they remain open to opportunities without becoming disheartened.”
In the past, the Logan property market has been a more affordable option compared to neighbouring cities, Brisbane and the Gold Coast, attracting many first-home buyers to the area, Mr Fruzande said.
“We hear a lot from first-home buyers at viewings or auctions, that is the only area that they can afford to buy in, but they really have to battle in order to secure them.”
Ms Day agrees, but hopes the reduced deposit rate will offer some level of reward for first-home buyers.
“For many, property ownership here has been the result of years of sacrifice, dedication, and hardship,” Ms Day said.
“It’s encouraging to see Logan sellers now in a position where their efforts may finally be rewarded.”
