First home buyers, locked out of the market for a long time, seem to finally be getting a look-in as prices fall.
In some areas they can now get deals on land and new homes that include a variety of discounts and bonuses, according to valuer Herron Todd White says.
First home buyers are the target market for this type of property but are also the sector hit hardest by interest rates and fuel costs. So in outer areas of Melbourne and Perth, developers have begun offering incentives.
These include landscaping or fencing bonuses and discounts for early settlements. In Perth, first home buyers are keeping the market going.
Outlying areas such as Kwinana in Perth's southern suburbs have seen prices fall by about 20 per cent, putting it about 30 per cent below the city's median house price.
Along with reduced land prices in Perth's fringe suburbs, HTW says, there are now more competitive building prices, more efficient construction times and, in some cases, rebates.
These can include cash back, rental rebates, whitegoods and electronics packages, fencing, landscaping packages and even cars.
Bargain hunting is not restricted to the first home market though.
In Melbourne, prestige homes in outer suburbs are showing the effects of over-capitalisation, with vendors having to accept less than they expected, HTW says. In Brisbane, the bottom end has taken a beating.
In the Kallangur area in Brisbane's outer northern suburbs, for example, HTW notes a 5 to 10 per cent drop in some lower-end prices, entirely driven by investors.
In the southern suburbs around Logan, prices may have dropped by around 15 per cent, or $20,000 to $40,000. Two and three bedroom townhouses are transferring from investors to first home buyers for $30,000 less than their recent values.
A two-bedroom townhouse in the Woodridge/Kingston/Logan area rents for $210 to $215 a week.
But from an investor viewpoint, maintenance costs are higher than average and capital growth lower, HTW says.
Cash is king and if costs continue to bite, those who felt they couldn't afford to buy may find they are now able to.
On the Sunshine Coast, HTW says, about half the 2007 gains of broadly 20 per cent have been lost and it's possible the rest will go too, depending on what happens to market sentiment.
"The really smart money is now buying into good areas at sometimes below replacement cost," it says in a monthly market report.
Naturally, sellers who won't meet the new price expectations are pulling their properties off the market. But with what HTW calls "wealth adjustment" and people's changing priorities, properties that wouldn't normally become available do.
This is more obvious in the prestige sector, but it will be across all the Sunshine Coast market segments, it says.
With talk now of an interest rate cut, there could be a window in the property market where both interest rates and prices are heading south, removing two of the reasons buyers have stayed away.
But there's always a catch and this time round it's likely to be credit availability.
Some pundits are now saying that lower rates and a lower Australian dollar will make lending to Australian banks less attractive.
In turn, the banks' reduced lending capacity will further undermine general economic growth.
