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When the developer Dyldam launched its South Quarter project at Parramatta – on the former Auto Alley – last  month they noted there was especially strong interest from first time buyers amid high local interest.
The average off the plan sale price was $750,000 in what will become a $876 million residential mixed-use project on the former Holden car yard.
It is a sign that after a lengthy absence, first time buyers are emerging across NSW, perhaps lured by the expansion in the available government grants. 
The latest ABS data calculated 2,426 first home buyer commitments in August which represented the biggest monthly number for five years.
Though still below the longterm average, NSW first home buyers accounted for 12.9% of owner occupier commitments over the month, the highest proportion since 2012.
It was up from a recent NSW low of 7.5% in February 2017 when it looked easy to conclude that our higher housing prices had significantly reduced the probability of many ever becoming an FHB.
There's been research recently done by the Reserve Bank of Australia which confirmed that ‘generation rent’ is a reflection of higher housing prices rather than any shift in preferences.
It seems young households still have a desire to become home owners, however, fewer potential FHBs are actually able to enter the housing market.
It particularly noted the underlying desire to become an FHB has not changed since the global financial crisis.
"However, people’s ability to, or comfort with doing so, has been affected," it noted.
The research suggests the decline in home ownership was not as much influenced as previously thought from social and demographic and factors, including key life-cycle events such as exiting the family home, marriage and having children. 
The research paper, comparing FHB loan characteristics in this pre- and post-financial crisis periods, shows the major consequence of the current higher prices is that FHBs have to save a much larger deposit.
That is despite maintaining a similar median loan-to-valuation ratio of around 83%.
The median deposit size increased by around $28,000 to almost $70,000 in the 2008–14 period.
The median purchase price of FHB homes across Australia in the 2008–14 period was $387,000, which was almost $100,000 higher than the price paid by FHBs in the 2001–07 period
The transition from being a renter to a first home buyer is the riskiest of steps in one's fiscal life. And I'd suggest those doing so currently are doing it with heightened risk.
But interestingly despite higher debt levels, households who became FHBs post-2007 appear to be paying down their mortgages and reducing their debt-to-income ratios at the same rate, or slightly faster, than households who took on a mortgage before 2007.
The research noted in the year after taking out a loan, the reduction in the debt-to-income ratio for FHBs in the post-2007 period was around 8%, compared to 5% for the pre-2007 borrowers. No doubt low interest rates being a key factor.
It also noted recent FHBs have been less likely to have ever been behind schedule on their loan.
This article first appeared in The Daily Telegraph. 
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j.ballantyne1990-6AQqhLzZaK

FHBs at heightened risk, despite great repayment track record 

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Are you getting ready to sell your house?
Setting the right asking price is going to be challenging for vendors as spring volumes peak and the summer break looms.
It can be a tricky task, especially when the property market is displaying signs of movement.
Sometimes a home can be listed into a seemingly strong market, which then weakens during the marketing campaign.
Most asking prices tend to a little above what the vendor will actually take, as this allows some negotiating space between the buyer and seller.
Often vendors get a very realistic offer early on from buyers who've been in the market for some time. They might also get a cheeky lowball offer.
It is one of those ponderables as to whether it is best to accept a speedy sale, or wait for that desired higher price.
Higher discounting certainly occur longer into marketing campaigns when the asking price simply doesn't match buyer interest so a vendor eventually accepts a figure well below the initial advertised price.
At the moment Sydney vendors are typically accepting 5.1% discounts on their asking prices to secure their house sales. It was 4.8% at the start of the spring selling season according to CoreLogic.
Canberra is a hot market so its vendors need only to discount by 2.5%, while Darwin is ailing and it requires a 9.9% discount before most sales are done.
The national average sits at just above 5%, with peaks over the past decade seeing 8% required discounting across Australia.
Ofcourse you will have your own idea on the worth of your property, but it is important to canvas and listen to the professions.
Before you signup to one agent, for auction or private treaty, be sure you get two or three other local agents to come through your property.
They will happily provide a report on how they see the local market, its likely direction, and just where your property sits within it.
It is important to get these varied insights for the best way forward.
And don't necessary simply select the agent who promised the highest price outcome.
You have to be comfortable working with your agent all the way through the listing.
Ofcourse the lucky vendors will find a buyer as soon as the for sale sign goes up from someone who's always fancied your home from just along the same street.
The less fortunate will be nervously hoping they finally get that pre-Christmas buyer, forever grateful they had secured extended settlement terms on their next home purchase.
The key is ascertaining where the localised market is placed pricewise, and often that relates to the level of stock.
Overall there's some 25,000 offerings across Sydney - around 20% more stock than the same time last year, which means buyers have more choice. There were 22,000 listings at the start of spring.
Ask your prospective estate agents what, say, four bedroom house stock levels have been in your suburb over recent times, and also find out what sales they have actually secured. 
Asking prices can of course change throughout a campaign but if a vendor’s expectation was unrealistically way too high even this is unlikely to trigger any sale.
This article first appeared in The Daily Telegraph. 
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