Desperate first home buyers are fuelling price ‘up-crash’ at lower end of market, experts say

Desperate first home buyers are fuelling price ‘up-crash’ at lower end of market, experts say Biggest house price increases in February come in smaller capital cities as buyers undeterred by interest rate hikes Follow our Australia news live blog for latest updates Get our breaking news email , free app or daily news podcast Hot competition for cheaper Australian homes has powered a relentless “up-crash” in prices despite rising interest rates, economists warn. Desperate first home buyers have bid up the price of affordable properties as they face off against investors, who have borrowed big despite government warnings they could lose tax discounts and deductions. Inner-city one-bedroom units in Brisbane have risen close to $20,000 each week, making sales prices from as recent as January irrelevant, according to Lauren Jones, a buyer’s agent. One open home, held the weekend after the Reserve Bank hiked interest rates, was flooded with 55 first home buyers, investors and downsizers, Jones said. Sign up: AU Breaking News email “Nothing’s changed since then,” she said. “People are more concerned about getting into the market right now than rate rises.” That two-bedroom apartment in Taringa, in Brisbane’s inner west, sold for $870,000. Jones’s buyer had expected it would be within their $800,000 budget but is now looking at one-bedroom units instead. National property prices rose 0.8% in February, as they did in January, taking the median price up more than $7,300 to nearly $923,000, according to Cotality data released on Monday. The biggest increases came in more affordable and undersupplied markets. Perth’s prices rose 2.3% or an effective $22,500, while Brisbane, Adelaide and Hobart each saw prices rise more than 1%. Sydney and Melbourne prices held steady, with prices weighed down by a rising number of new home listings, while the rate rise hit the top of the market. The highest-priced quarter of homes in Sydney fell 0.9%. Strong competition for cheaper homes offset...