Lowering of HomeBuilder Grant payments ratchets up pressure to act now
The Federal Government has announced an extension of the of HomeBuilder scheme for a further three months to 31 March 2021, however, will lower the payment from $25,000 to $15,000 from 1 January. This will be fantastic news for buyers who have been saving their deposit expecting to miss out on receiving a grant, but ratchets up pressure on the market looking now to act quickly or face a double whammy of paying higher prices and receiving a lower grant amount.
As explained in this column previously, the market has a misconception believing they have until 31 December to exchange contracts. While this is not factually incorrect, it fails to account for Christmas holidays starting from 24 December and conveyancing timeframes to exchange contracts currently exceeding three weeks (at best) and often taking over a month. I recently heard the conveyancing process eloquently described as a ‘disaster’ by a very charismatic developer who identified timeframes to exchange contracts had more than doubled in the last few months.
New development applications are not offering much in the way of new supply for buyers seeking townhouses. Aside from small sites in greenfield suburbs there is a shortage of new supply coming in early 2021. This part of the market is currently experiencing significant demand, causing some buyers who take time to consider their decision to be disappointed when they contact the agent hours or days later and find out the property has sold.
Inability to scale skilled resources in line with higher transaction volumes means conveyancing timeframes may get longer. On the basis timeframes to exchange contracts remain constant, and allowing for the Christmas shutdown, buyers have only two and a half months to make their decision. Historically there is little new stock released prior to Valentine’s Day (14 February) resulting in now being the best opportunity to choose your new property.
Plenty of heat in the market
On Saturday 28 November, Canberra recorded a preliminary auction clearance rate of 74%. This was the second week of the preliminary auction clearance rate moderating to below 80%. Of the 70 reported results, 52 properties sold with a gross sales value of $40,905,600 and median of $890,000. Individual results indicate plenty of heat in the market demonstrated by a property in Hughes selling for over $2,000,000 and breaking the suburb record.
Robust demand across the market saw Canberra property values increase by 1.9% during November, according to CoreLogic’s Monthly Home Values Index. Our median property value of $672,866 now exceeds Melbourne’s at $672,172, as explained why it would in this column on 8 August. Delaying decisions has quickly become an expensive exercise.
With Sam Dodimead, local property professional and host of Canberra Property Podcast where you can get to know the consultants contributing toward deliver of new buildings. Stream from wherever you listen to podcasts.
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