Sydney strongest for FHB followed by Perth: Stockland

Potential first home buyers are eyeing off the market as rents approach the cost of repaying a mortgage, according to Stockland boss Mark Steinert.

He says interest is strongest in metropolitan Sydney and in Perth.

"The main thing we're seeing now is at the affordable end, a first-home buyer, particularly with the state grants that are focused on new construction both on the eastern seaboard and now Western Australia, that their repayments on the mortgage aren't that different to rent," Steinert told Business Spectator.

Stockland’s Willowdale development in East Leppington in Sydney had more than 1000 pre-registrations. First home buyers form a strong base for Stockland.

“There’s a very significant employment base over in Parramatta, Liverpool and Campbelltown. That is actually a big part of the economic engine of Sydney,” he says.

But he says while they are coming back to the market the looming election is keeping them cautious.

“There has been a lag response to first home buyer stimulus,” Steinert told The Australian Financial Review last week.

“Sentiment remains an issue and buyers are still a bit more cautious about taking on leverage.”

He says low interest rates now mean home loan repayments are lower than rent payment which makes buying more attractive for first-home buyers and those seeking to upgrade.

“We are starting to see constructive signs of that,” he said.

First-home buyer sentiment is strongest in the Sydney metro region and in Western Australia, driven by population growth from migrants who may already own homes overseas but are still recognised as first-home buyers.