The property market in Melbourne has seen a drop in investment property purchases, paving the way for more opportunity for first home buyers to get their foot in the door of home ownership.
High levels of homes being purchased purely as investment properties to build property portfolios drive market prices up due to increased demand, leading to a flow on effect that sees first home buyers with lower budgets pushed out of the market. However, when property investors are less active in the housing market, it can make it easier for first-time homebuyers to secure a home for a few reasons.
Property investors typically buy homes to rent them out, and they often target properties that are within the budget range of first-time homebuyers to reduce cost outlay and recoup their purchase price faster. If investors are absent from the market, there’s less competition for these properties, which means less pressure on home prices and more options for first-time buyers.
With fewer investors driving up prices, there is less demand for affordable homes, and house prices can stabilise or even decrease. This is beneficial for first home buyers who are often working with limited budgets and need prices to remain affordable in order to make an offer on a home or bid at auction.
Investors may purchase multiple properties or target areas with high rental demand, which can increase the overall demand for homes in those areas. Without investors in the market, this can lead to a more stable or even lower demand, reducing the likelihood of bidding wars and making homes more affordable for buyers who are purchasing their first home as a primary residence.
Investors may drive up prices by speculating on future value increases, especially in quickly developing areas. When fewer investors are in the market, home prices are less likely to be artificially inflated by speculation, making it more likely that first home buyers can purchase homes at reasonable prices.
Essentially, when property investors aren’t as active, the market tends to be less competitive, which benefits people looking to buy their first home. If you’d like to take advantage of a quieter investment market, get in touch with Bayside Real Estate Advocates today to find your first home. With an $8,800 inc fee and our expert purchasing advice, we will take the stress out of your first home buyer journey.
