Price bands continue to reflect the upward movement of purchasing power, with the million-dollar-plus bracket increasing from 17.1% in 2020 to 30.7% in February 2021. This shift reduces the lower price brackets and distribution points due to the availability of properties. The under-$500,000 category saw a decrease in sales transactions from 2,117 (30% of all sales) to 1,399 (17.6% of all sales). This shift demonstrates the rise in prices and the new market distribution, where fewer lower-priced properties are available, and a stronger focus is on the $750,000-$999,000 bracket, with significant growth in the million-dollar-plus range. How first-home buyers and investors fit into this market is often overlooked.
First-home buyers removing stock from the market without replacing it, along with investor purchases, is reducing overall inventory levels. Recent data from the Reserve Bank shows that 53% of all purchases are made by investors and first-home buyers, contributing to the decrease in stock.
While demand is driven by confidence, low interest rates also support affordability for buyers. Ray White Group, through the Loan Market Group, has seen a constant high level of pre-approvals, indicating continued interest in property purchases.