Residential housing developers offer first home buyers deep discounts

Residential house and land developers are offering first time home buyers cash incentives to first-home buyers to fill the hole in the residential property market left by second and third home buyers who can't sell their existing homes to move up.
Land developers are also moving to cut the size of their lots and change their housing designs to a more affordable product as they move to capture demand in the only area of the housing market showing signs of life. Many see this as a strange move considering that the natural flow of first home buyers buying used homes to start where land is expensive, so that second home buyers can move to a better house and land has been broken only temporarily due to lack of buyers for their existing homes and the short window for the increase in the the first home owners grant, which ends in June 2009.
It comes as figures from the Australian Bureau of Statistics released this month show the number of first-home buyers seeking loans increased by 17.8 per cent in November, the highest level since 2002.
Queensland general manager of Brisbane-based developer and builder Devine, Paul Nash, said second-home buyer demand has been sluggish, but when the $21,000 first-home owner's grant was introduced in October, there was a pickup in first-home owner inquiry.
One swallow does not make it springtime
"We had a spike, but the activity was flat in November and December," he said. "As a result, the company has been making its lots and housing designs smaller and more affordable.
" We are offering to top up the grant. We will make up the extra from the $21,000 to take it to about $30,000," Mr Nash said.
Chris Lamont from the Housing Industry Association said there were other developers offering similar discounts, which was a popular move by developers when GST was being introduced about nine years ago.
First Home Buyers growth
Mr Nash said in the past year, first-home buyer sales had doubled from about one-third to about two-thirds of the company's business.
Three-bedroom houses started in price at $299,000 in Caboolture in Brisbane's Northern corridor, while prices started at about $219,000 in Pakenham on the outskirts of Melbourne and $209,000 in South Australia about 30km north of Adelaide CBD.
The sales manager of the Cornish Group in Sydney, Colin Lake, said the company had about 17 house and land packages that sold in the past month to first-home buyers, starting from $350,000 at its Spring Farm development in Sydney's Camden.
"Before October, we were doing about four or five a month, now we are doing about 30 a month," he said.
Last month, the company saw a change in the market and cut blocks to smaller sizes and reduced the prices by up to $50,000. He said the company had so far sold 120 blocks.
"We decided to just slash and burn, cut the prices and get the market running."

Home builder developments offer massive rebates to First Home Buyers

Residential land and home construction developers are offering big rebates to first-home buyers to secure a bigger slice of the shrinking residential property market.
Residential developers are pursuing first home buyers by moving to cut the size of their lots and change their housing designs to a more afforable product as they move to capture demand in the only area of the housing market showing signs of life.
It comes as figures from the Australian Bureau of Statistics released this month show the number of first-home buyers seeking loans increased by 17.8 per cent in November, the highest level since 2002. Second and third home buyers markets are shrinking, making the total pie smaller.

Devine Homes gets traction with first home buyers.
Queensland general manager of Brisbane-based developer Devine, Paul Nash, said second-home buyer demand has been sluggish, but when the $21,000 first-home owner's grant was introduced in October, there was a pickup in first-home owner inquiry.
"We had a spike, but the activity was flat in November and December," he said. "As a result, the company has been making its lots and housing designs smaller and more affordable.
" We are offering to top up the grant. We will make up the extra from the $21,000 to take it to about $30,000," Mr Nash said.
Chris Lamont from the Housing Industry Association said there were other developers offering similar discounts, which was a popular move by developers when GST was being introduced about nine years ago.
Mr Nash said in the past year, first-home buyer sales had doubled from about one-third to about two-thirds of the company's business.

First home buyers homes for $209,000 to over $350,000
Three-bedroom houses started in price at $299,000 in Caboolture in Brisbane's Northern corridor, while prices started at about $219,000 in Pakenham on the outskirts of Melbourne and $209,000 in South Australia about 30km north of Adelaide CBD.
The sales manager of the Cornish Group in Sydney, Colin Lake, said the company had about 17 house and land packages that sold in the past month to first-home buyers, starting from $350,000 at its Spring Farm development in Sydney's Camden.
"Before October, we were doing about four or five a month, now we are doing about 30 a month," he said.
Last month, the company saw a change in the market and cut blocks to smaller sizes and reduced the prices by up to $50,000. He said the company had so far sold 120 blocks.
"We decided to just slash and burn, cut the prices and get the market running."

First home buyers dream market as house prices continue to fall

First time home buyers have a dream market and finance situation, if they are in a position to take advantage of it.
Firstly, the first home buyers grant has been doubled to $14,000 for established homes and trebled to $21,000.
Then the interest rates have fallen 4 percent in six months.
The icing on the cake for first home buyers is that house prices are continueing to fall as home for sale stay unsold.
In fact house prices and have have fallen for the third successive quarter.
The national house price index fell 0.8 per cent in the December quarter, the Australian Bureau of Statistics said.
This compares with a downwardly revised 2.4 per cent fall in the September quarter, and a 0.8 per cent fall in the June quarter.
In the year to December, the house price index decreased 3.3 per cent, compared with an annual rise of 1.6 per cent in September.
Economists had expected a fall of 1.0 per cent for the December quarter.
Prediction: House prices to fall 10 per cent in 2009
JPMorgan economist Helen Kevans said the Federal Government's boost to the first home buyer grant had slowed down the pace of house price decline in the December quarter.
First home buyers are the growing market segment in a shrinking market
"First home buyers accounted for 23.6 per cent of all home loans in November, well above the 19.5 per cent recorded in October, and the highest level since early 2002," Ms Kevans said.
"This may have provided some support for house prices late in 2008."
Ms Kevans said Australian house prices would fall by 10 per cent in 2009.
This would be a lower pace compared with other countries because of Australia's housing shortage and growing intake of skilled migrants.