First-home buyers in South Australia are facing their toughest market in years, as record demand for new homes pushes prices beyond reach, despite government incentives.
Kapil Virmani (pictured), director of Think Mortgage in Adelaide, said interest has surged since the state government expanded stamp duty relief and grant eligibility on Feb. 13.
“Since the changes came in, interest in new homes has skyrocketed,” Virmani said. “But the supply just isn’t there, especially under $900,000 – and that’s where most first-home buyers are trying to get in.”
Under the new rules, eligible South Australians can access a $15,000 First Home Owner Grant and a full stamp duty exemption on new homes. While this has made it one of the most attractive times to buy, the limited supply is pushing buyers out of the market.
“Four years ago, a home that would’ve cost $750,000 or $800,000 is now going for $950,000. That’s a big jump, and many buyers simply can’t stretch that far,” Virmani said.
Developers have responded to demand by raising prices.
“They are asking for higher prices and, in most cases, they’re getting them,” Virmani said.
Many of Virmani’s clients have been searching for months without success, with properties often selling before reaching the open market.
“The builders I speak to have so much work lined up that they could stop taking new jobs today and still be busy for the next two to three years. That’s how extreme the demand is,” he said.
Virmani believes the state government underestimated how quickly demand would surge following the incentives. He said more needs to be done to release land and speed up approvals for new homes.
Despite the challenges, Virmani urged first-home buyers to stay committed.
“Patience and preparation are everything,” he said. “Get pre-approval first because no agent or builder will take you seriously without it. Then start building relationships with local agents. That’s how you hear about properties before everyone else does.”
Virmani also advised buyers to make strong upfront offers. “You might only get one shot at a property. If it’s the right one, don’t hold back. Missing out over $1,000 could cost you your dream home.”
Virmani said mortgage brokers play a critical role in helping first-home buyers navigate the competitive market.
“Working with an experienced mortgage broker, particularly one with strong industry connections and expert knowledge of government grants and incentives, can also make a big difference in helping first home buyers secure their dream home in a highly competitive market,” he said.
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