Home building companies say land is selling in a matter of hours and they are experiencing a stampede of desperate buyers similar to when the federal government’s HomeBuilder scheme ended in March.
Victoria’s FHOG of $20,000 has been on offer to first-home buyers building a new home in regional Victoria since 2017, but the recent state Budget revealed this amount would drop to $10,000 after June 30 this year, bringing it in line with grants in metropolitan areas.
Metricon’s general manager for regional housing Victoria, Phil Barrett, said the grant change had seen those considering building a new home in regional centres pushing forward plans to cash in.
“We’ve experienced another big rush of sales to secure a new home, similar to the surge we saw earlier in the year when the HomeBuilder scheme drew to a close,” Mr Barrett said. “Right across the state, we’re seeing people who have been considering buying their first home in regional Victoria, with an [extra] $10,000 incentive to make their decision within the next four weeks.”
Home-builders Burbank had also seen an “immediate increase” in enquiries following the announcement.
“We have seen a significant and ongoing increase in people choosing to build new in regional Victoria, particularly since COVID-19, the federal HomeBuilder grant and the $20,000 state first-home owner grant,’’ national general manager of residential housing Louis Sultan said.
Regional house and land sales had made up at least a quarter of total sales for Burbank in recent months, he said.
“From February to April this year our regional sales made up 25 per of our total sales – that is up from 16 per cent of total sales in the same period a year ago,” Mr Sultan said. “Ballarat and Bendigo have been particularly strong.”
In Ballarat, house and land packages had been selling out within hours of being listed, making it difficult for buyers to find somewhere to buy.
“The demand is just insane,” Jellis Craig Ballarat partner Matt Wiltshire said. “With land releases, it’s just first-in, best dressed, which we’ve never had to deal with before. Blocks sell out within hours.”
Mr Wiltshire said the demand was likely to continue and believed the drop in the FHOG had not had an impact on the market so far, as first-home buyers were not the only ones buying the packages – upgraders and investors were also part of the market.
The latest release of land in Ballarat – 23 blocks at Conroy’s Green Estate about five minutes from Delacombe – sold extremely quickly, he said.
In Bendigo, it was a similar story. Tweed Sutherland First National director and auctioneer Matt Leonard said there had been no race to buy before the grant halved simply because there were no available house and land packages.
“There’s no land in Bendigo left for sale – it has completely sold out,” Mr Leonard said. “We just sold a subdivision and it sold out really, really quickly.”
That land, at Imagine Estate in Strathfieldsaye, was on offer for a higher price than most first-home buyers would be looking for, Mr Leonard said, with other buyers moving in to snap it up.
There is a growing competition now between first-home buyers and investors on both established and new home builds, with potential landlords looking to cash in on the extraordinarily tight vacancy rates, which are as low as 0.5 per cent in some regional areas.
While the news is great for local communities, who had, until recent years, seen an exodus of young people as they looked for work, it does mean that there could be some longer-than-expected waits for builders or even to process contracts of sale.
Burbank’s Mr Sultan said first-home buyers who wanted to take advantage of the $20,000 grant before it ended needed to complete all relevant paperwork and have pre-approved finance to buy.
“Pending where our customers are on their new home journey there may be uncontrollable delays due to process times that will impact their eligibility to access the grant,” Mr Sultan warned. “We are working closely with our customers to support them as best we can so they can meet the deadline.”