The housing sector is still going strong despite the enlarged first home owners grant phasing out on December 31, with clearance rates and volumes similar or higher than last year's results.
Adviser Edge research head Louis Christopher says while some first home owners are still looking for properties, many would have already pushed their purchasing decision into 2009.
"Some first home buyers are perhaps looking to buy, but mostly it's been upgraders, people buying their second or third home and of course with that any number of investors. It's a mix of those two."
New figures from the Australian Bureau of Statistics indicate some of these buyers may be looking to renovate a property and then sell. The figures show Melburnians have spent more on renovations than any other residents, spending $1.66 billion in 2009.
Melbourne has also recorded the highest price increases, with Australian Property Monitors noting an 18.5% increase in 2009.
Additionally, New South Wales residents spent $1.62 billion on renovations, residents in Queensland spent $1.18 billion and those in Western Australia spent $630 million.
APM economist Matthew Bell says some of these buyers are indeed looking to renovate, but most will be a combination of upgraders, looking to buy a second or third house, and investors.
"I expect the buyers are not first home buyers simply because interest rates are going up and the boost has expired. It's probably a combination of upgraders and investors, and that's reflected in last year's median auction prices, which were going at a very fast rate. They were moving to more expensive houses."
But Bell also says he expects the first home owners market to recover this year, possibly even within the next few months.
"I do think they will come back, and I don't even think they'll take a whole half of a year. I think there is a drop off now, and that's reflected in housing figures, but the fact is people don't really expect big house price drops any more, and the longer you wait, it's not getting any more affordable. I think that will drive first time buyers."
In auction results, Christopher says the figures are roughly normal for this time of year and is hesitant in using them as the basis for a prediction.
"Volumes are slightly higher on the same time as last year, but it's really early days and hard to answer or make any judgements on the week that's gone by. The auction results for this time of year slowly build up."
In Melbourne, Real Estate Institute of Victoria chief executive Enzo Raimondo said in a statement the market has "picked up where it left off last year".
"Buyers have not been dissuaded from strong bidding by the three interest rate rises last year nor the expectation that more will come this year."
"The reduction in financial assistance to first home buyers on December 31 does not appear to have had a negative impact at this point, especially as population growth brings more buyers to the market compensating for the fewer first home buyers."
The REIV reported 164 auctions on the weekend, compared to 99 on the Black Saturday weekend in 2009. Clearance rates reached 83%, with total sales reaching $77.43 million.
In Sydney, 66 properties were sold with a clearance rate of 69%, while the value of total sales reached $39.7 million. Brisbane recorded a 40% clearance rate with just four properties at a total of $1.8 million, while Adelaide recorded 54% with 20 properties sold at a total of $13 million.
