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Are first-time buyers being priced out of the market?

11 Jul 14

A rise in home values across the country has made it even more difficult for first-time buyers to make their initial steps onto the property ladder - and research suggests this is a trend that is already taking place.

Sales of properties valued under $200,000 accounted for just 6 per cent of transactions in Adelaide in April this year, RP Data revealed, suggesting the situation is better in South Australia than some other parts of the country.

Canberra saw only 0.9 per cent of its sales completed on properties at the more affordable end of the market, followed by Perth (1.4 per cent), Melbourne (1.5 per cent) and Sydney (1.7 per cent).

Brisbane and Darwin registered completed sales of 2.4 per cent and 4.8 per cent respectively.

Adelaide came second only to Hobart, where 13.5 per cent of sales during the period in question were for properties valued under $200,000.

The majority of sales in Adelaide (48.4 per cent) were for properties between $200,000 and $400,000, while 30.1 per cent were for real estate valued from $400,000 to $600,000.

Cameron Kusher, RP Data's senior research analyst, explained how those who have undertaken real estate courses will need to appreciate how properties fare in the context of their local markets.

Buyers usually don't look to a single suburb but instead want an overview of what's happening in a locality and whether it offers any advantages over other locations.

Many purchasers are also turning to units as an alternative to houses, as they are generally more affordable and open up some of the country's most desirable locations.

People are now more inclined than ever to compare the cost of a unit to that of a detached property or townhouse, particularly as they give increased consideration to affordability constraints.

Mr Kusher emphasised that with more properties being priced at the higher end of the market, research will become even more crucial for securing the best buys.

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