November 11, 2014
A majority of first homebuyers believe they won't be able to afford exactly where they want to buy, new research has revealed.
According to Mortgage Choice's 2014 First Home Buyer Survey, which canvassed the opinions of more than 1,000 future first time buyers who plan to purchase a property within the next two years, 54.3 per cent of respondents said they will not be able to buy where they want to.
Of those who indicated they would not be able to buy where they wanted to, 88.8 per cent said it was because “the area is out of their price range”.
Speaking about the findings, Mortgage Choice spokesperson Jessica Darnbrough said while the majority of first time buyers had indicated that they may not be able to buy in their dream suburb, they are still committed to the idea of putting a foot on the property ladder.
“When the survey asked the first time buyers why they were looking to purchase property within the next two years, 53.3 per cent said it was because they wanted to ‘set themselves up financially for the future',” she said.
“This reaction indicates that first time buyers see benefits in buying property and as such, are keen to get themselves on to the property ladder sooner rather than later.
“In fact, it is not uncommon to see first time buyers purchase an investment property before an owner occupied property.
“Purchasing an investment property first allows first time buyers to purchase where they can afford and still live where they want to.”
According to Mortgage Choice's Investor survey released earlier this year, more than 20 per cent of investors said they purchased an investment property before an owner occupied property.
“At Mortgage Choice, we are seeing an increasing number of first time buyers purchasing investment properties before owner occupied properties,” Ms Darnbrough said.
For those who are thinking of purchasing an investment property before an owner-occupied property, Mortgage Choice offers the following tips:
Choose wisely: When investing in real estate, it is important to buy the right property at the right price. The ideal investment property is one that will not only increase in value over time, but one that is attractive to potential tenants.
Do your sums: When investing in property, it is important to look at it as a long term investment, so make sure you can afford your mortgage repayments over the longer term. A finance professional can help you to structure your investment so that it suits your needs and circumstances both now and into the future.
Understand the market dynamics: Having a good understanding of the property market as well as its ebbs and flows will help you to choose the best investment property for your needs and future financial goals.
If you would like learn more about your home loan or financial advice options, call 13 77 62.