Riding the Wave: Government Stimulus Package Brings
Real & Manufactured Property Demand
By now you would be well and truly aware of the Federal Government’s recent stimulus package that was announced to boost our property industry after the wake of Covid-19. If not, you can read all about it here.
The $25,000 HomeBuilder grant is available to eligible buyers and properties, in an effort to stimulate our otherwise cautious property market. Specifically in SA, we are seeing the majority of interest in the HomeBuilder grant coming from young first home buyers (and their mums and dads!) who are able to combine this with the existing $15,000 First Home Owner’s Grant. This injects a solid $40,000 towards a new home buyers’ purchasing power, and the fear of missing out on either the grants or a property are bringing intense demand.
This is particularly evident in the new-homes space - house &land packages and off the plan purchases with imminent start dates. These properties are seeing exceptional demand - that is, in part, a manufactured demand, brought forward due to the available grants.
But what does this mean for the market as a whole? Well let’s break it down.
ELIGIBLE PROPERTIES AND BUYERS
Bringing decisions forward is what the Government hoped to achieve with the stimulus package, to support the property and construction industry here and now when they need support. Well, so far it seems like it is working. We are seeing demand for new homes like we haven’t seen in recent times. Currently our sales rate since the HomeBuilder grant was announced is a solid 33% up on our existing forecasts. This means we are seeing a sales rate better than before the pandemic took its toll. But what does this mean for the rest of the property market?
NON-ELIGIBLE PROPERTIES AND BUYERS
About 20% of our available properties do not qualify for the HomeBuilder grant. Of which, about 50% are at a price that cuts out the first home buyer market – think $1M+ penthouse apartments and the like. Even though they aren’t eligible for the grants, these properties and buyers are still benefiting from the stimulus package, albeit not financially.
The positive sentiment is radiating throughout the market. Spirits are lifted and confidence is bolstered – and with this comes renewed interest in high-end properties. The manufactured demand with the first home buyers and Government grants has stimulated real demand across the board. And to think we are riding this wave through the winter months which are typically the most quiet.
Adelaide has always been a “slow and steady wins the race” type of property market, so it will be interesting to see how this manufactured demand will effect our market long term.
For now, we are riding this wave and our clients are enjoying the results – both developers and buyers alike. Take a look at the projects we have available right now, and perhaps you could capitalise on the current economic climate too.
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