Jessica Broome has been searching for a home for seven months and during that time open for inspections have evolved into events that resemble music festivals.
“We recently pulled into a quiet street in the Dandenongs and it was chock-full of cars,” she said.
Jessica Broome has missed out on five properties in the Dandenong Ranges despite making offers up to $70,000 above the top of the advertised range.Credit:Luis Enrique Ascui
“People were milling about, waiting to go into the house, they were in the garden, walking around and bumping into each other. It’s mad.”
Like many Victorians hoping to get their foot into the property market, Ms Broome is growing increasingly despondent, particularly in light of predictions that Melbourne’s median house price will hit $1 million by June.
It’s a figure Ms Broome describes as “intimidating” and the 41-year-old is on the cusp of giving up on her dream of owning a home.
Ms Broome, her husband Julian and two-year-old daughter Ember have missed out on five properties in the Dandenong Ranges despite making offers up to $70,000 above the top of the estimated range.
“What’s the point in trying anymore?” she asks. “We keep on getting turned down and there are so many people out there with more money. I feel like without some spark of luck it’s not going to happen.”
The young family, which is currently renting in Brunswick East, look good on paper.
Ms Broome and her husband have spent almost a decade saving a 25 per cent deposit for a house and have stable jobs in consultancy and education.
But that doesn’t seem to be enough in a market where house prices have soared by 4.8 per cent – or nearly $45,000 – over the March quarter to a record $974,397 median, according to the latest Domain House Price Report released this week.
While Ms Broome acknowledges she’s fortunate to be able to save a deposit, she worries about what will happen to a generation of Australians like herself who may miss out on owning a home.
“They will be renting at retirement age or have nowhere to live. It’s a ticking time bomb.”
Buyers advocate Julie DeBondt-Barker specialises in helping first home buyers secure a property and said she’s never seen such a competitive market in her 18-year career.
She said before this year, it was common for houses to sell about 10 per cent above the top end of the agent’s quoted range. Now it’s becoming increasingly common for houses to sell 20 per cent above the top end of this range.
“This market is moving at the speed of light,” the director of Property Home Base said. “If the buyer waits even three months, they could easily be spending 5 to 10 per cent more for the same house.”
Ms DeBondt-Barker said the dramatic rise in house prices was due to pent-up demand during months of lockdown when real estate was at a standstill, as well as people saving more money because they weren’t travelling or going out.
Record low interest rates are also fuelling the growth by increasing people’s borrowing capacity.
While regulators have not yet placed restrictions on lending to cool the market, the Australian Prudential Regulation Authority and the Reserve Bank of Australia are closely monitoring the situation.
Domain senior research analyst Nicola Powell said it was becoming increasingly difficult for people to save a deposit.
Last year, it took a 25 to 34-year-old couple on average wages around six years to save for an entry-level house deposit in Melbourne. Ms Powell said it’s likely this time frame has blown out further. She said more Australians were becoming lifelong renters, not by choice but because they had been shut out of the property market.
“It is really challenging,” she said.
But there is some light at the end of the tunnel for buyers like mother-of-three Alissa Breiman, who purchased her first property in St Kilda East this week after a gruelling, two-year hunt.
While the house needs significant work before the family can move in (it doesn’t have proper floors) she’s relieved to have found a place and reclaim her weekends.
“Two years ago I wouldn’t have bought this house because our budget could have bought us everything we wanted,” the teacher said.
The 37-year-old said she became very scared over the past few months as prices skyrocketed.
“I was petrified that we were out of the game,” she said.
“We had to change our expectations and fine-tune what our priorities are. They are orientation and location.”
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