Boomers put super squeeze on first home buyers

Wealthy baby boomers are snapping up apartments across Sydney to bolster their self-managed super funds, helping to dash the hopes of frustrated first home buyers.

Agents estimate super fund buyers have doubled since last year - some snapping up whole apartment blocks - as the numbers of first-timers in the market drop to a trickle.

Freelance writer and TV producer Tom Whitty has had a gutful. ''I'm saddened that both my girlfriend and I will have no choice but to work well into our 30s so we can squirrel together a deposit for that two-bedroom dive that she's so sure is just around the corner,'' he said in a familiar tale on smh.com.au.

Advertisements along  with being tired of real estate ''sharks'' and ''spruikers'' and ''snake oil salesmen'', he lamented the tax breaks for investors that would ''inevitably lead to a backlash on election day'' if they were removed. His story drew 862 comments.

Rocco Pirrello knows exactly how he feels.

The 23-year-old, who lives with his parents on the lower north shore and works in marketing for an insurance brokerage, has been looking for six months and is fed up with apartments selling for far more than agents say they will. ''The price guides are definitely underquoted in almost every case,'' he says.

The O'Farrell government's lure of $15,000 to buy a new property doesn't wash with him either.

''They're still too expensive,'' he says. ''I've gone to a few of the display apartments, but you need to fork out another hundred grand for basically the same thing but new.

''And it seems a lot of the people who are there are investors.''

It's a far cry from the first-timer glory days of 2009 when there were government grants of $14,000 - even $21,000 for new properties - plus stamp duty exemptions.

These days first home buyers of established property get nothing.

Ray White Elizabeth Bay's Laura Bitar estimates the number of investors using their self-managed super funds to buy property has doubled since last year, while the number of first home buyers has halved. ''At auctions, the investors are definitely outbidding the first home buyers,'' Ms Bitar said.

She remembers an auction day in 2011 - as those attractive first home buyer incentives were about to run out - where the properties at all 13 auctions went to first home buyers.

''We did sell four properties under $500,000 to first home buyers last month, but they all had their parents helping them.''

With the government incentives gone, parents paying at least part of the deposit is the only solution for many.

''My parents did help out a little bit,'' said 30-year-old lawyer Anthony Luk, who bought a two-bedroom apartment in Pyrmont for $653,000. He already had substantial savings.

''It just allowed me to get into the market a little bit sooner,'' Mr Luk said. Like many first timers, he's not keen on auctions so he snapped up the property beforehand. And he wasn't attracted by the government's inducements to buy new.

''I prefer older properties because I can see how it's maintained and managed,'' Mr Luk added.

Adrian Wilson, of Wilson Property Agents, who sold the property to Mr Luk said he was still seeing some first home buyers.

''For professional couples with a double income and a bit of a deposit, purchasing at $600,000 isn't such a stretch,'' he said.

Sydney property market prices boom to beat those in Manhattan, Paris and London

SYDNEY'S property market has stepped up to the world stage with inner-city prices topping those in Manhattan, Paris and London and uninhabitable hovels in the inner west fetching up to $800,000.

As the popularity of city fringe suburbs like Paddington, Darlinghurst and Surry Hills soars, some local listings are fetching more than $13,000 per square metre - pricier than lifestyle hubs in Manthattan, Paris, Hong Kong and London.

A dilapidated Newtown terrace with rotting carpets and holes in the ceiling, bequeathed to the RSPCA, sold at auction for $800,000.

Former London real estate agent and now host of Foxtel's Selling Houses Australia Andrew Winter said within just a decade Sydney has appeared on the international property stage.

"Years ago there was no comparing London and Sydney prices. But now despite what really is a minute population, Sydney is up there on the top 10 list of residential cities," he said.

"Sydney has become a 'lifestyle city' with people coming from all over the world to call it home. Even if they don't just work in Sydney, it has become a base for many international residents.

"Interestingly, when you look at these inner-city Sydney suburbs where prices now compare internationally, many of the homeowners have lived at some point in London, New York or Hong Kong, so they know what real estate can cost."

Sydney buyer's agent Patrick Bright said while other global cities market property with a price per square metre, or foot, Sydney real estate agents do not, making it hard for buyers or sellers to know what Sydney is worth by the metre.

Mr Bright said lifestyle, location and view all came into play with Sydney real estate and when all those elements combined it lifted local property prices to international levels.

"I think that's why auctions work so well here, because you might have an idea of what a property is worth, but when there's a stunning view of the water, emotion kicks in and the price goes up," he said.

The theory held on the weekend in Newtown where 27 registered bidders did battle for a three-bedroom Denison St property with rotten carpets, stained and peeling wallpaper and sunlight streaming through the upstairs ceiling, which had been marketed with price expectations of over $650,000.

Zanita Morgan's winning bid raised $800,000 for the RSPCA after the property was left to the animal charity in the former owner's will.

She said she and her husband, who bought the house with friends, planned to renovate and on-sell.

Last month, a 34sq m unrenovated studio in Elizabeth Bay attracted 42 registered bidders at auction and sold for $462,000, or $13,588 a square metre for a single room.