Affordable apartments also outperformed their pricier counterparts with a 0.6 per cent increase for those worth under $450,000, compared to 0.4 per cent for those in the middle of the market and a 0.5 per cent decline for the priciest homes.
CoreLogic head of research for Asia Pacific Tim Lawless said the cheapest segment of the housing market had typically been more resilient to downturns than million-dollar homes due to more volatility in the top-end of town. This also means more expensive homes tend to outperform during price booms.
“This cyclical trend has been amplified by the rise in first home buyer numbers where demand for low to mid-priced properties has remained stronger through the COVID period,” Mr Lawless said.
“Looking forward it’s likely the more expensive end of the housing market will start to outpace the lower quartile, again due to the cyclical factors outlined previously, but due to the potential for less activity from first home buyers as incentives expire and affordability pressures mount,” he said.
First-home buyer financing is up about 50 per cent compared with the same time last year on Australian Bureau of Statistics figures, bringing it to record levels, while non-first timer activity is up 25 per cent and investor financing has risen 2.8 per cent.
The federal government introduced HomeBuilder in June, a $25,000 grant for those building a new home, and expanded the First Home Loan Deposit Scheme by 10,000 places for 2020-21, which helps new buyers to use a 5 per cent deposit.
NAB executive of home ownership Andy Kerr said there had been “strong demand” for the deposit scheme and overall loans to new buyers nationally but Victoria was sluggish compared to other states and territories. NAB and the Commonwealth Bank of Australia are the major lenders for the program.
“We expect this demand to continue well into 2021, especially given the current conditions make buying cheaper than renting for many prospective first-time homeowners,” Mr Kerr said.
AMP Capital chief economist Shane Oliver said first-home buyer demand was “booming” and he was not expecting a halt in early 2021. “I reckon first home buyer demand will remain really strong over the year ahead reflecting the combination of ultra-low interest rates, numerous state and federal incentives aimed at first home buyers and an improving jobs market,” Dr Oliver said.
Jennifer Duke is an economics correspondent for The Sydney Morning Herald and The Age, based at Parliament House in Canberra.