November 28, 2012
It’s often believed that first homebuyers enter the market early on in life. Although, recent research shows that more first homebuyers plan to save for a longer period of time and purchase their first property later in life.
Mortgage Choice’s annual study of 271 NSW/ACT first homebuyers who plan to buy their first home in the next two years found 49% of first time buyers will be aged 30-39 years, 35% will be 18-29 years of age, 16% will be 40 and over. Surprisingly, the number of first homebuyers aged 30 or more years has increased from 55% in the 2011 survey to 65%.
The research also shows a rise year on year (of three percentage points) in the percentage of first homebuyers intending to save for two or more years before purchasing their home.
It is interesting to see more first homebuyers are saving for longer and purchasing later in life, perhaps at a time when they are in a better financial position, have researched their ideal location well and are keen to settle into a property they will call home for many years to come.
Despite their desire to buy, many first homebuyers have concerns about their up-coming property purchase. Buyers are concerned with rising house prices, with over one in four (30%) first homebuyers claiming this is their greatest concern, compared to just 28% last year.
While many of the economic indicators such as rate cuts, lower house prices and improved affordability might suggest now is a good time to buy, people are still nervous about their ability to sustain employment. Fears over job security have rocketed over the past year with almost one in five (17%) future first time buyers claiming this is their major concern (compared to just 13% in 2011).
Conversely, fewer buyers are concerned about the impact of interest rates on their ability to purchase their first home (7% this year compared to 15% in 2011).
The greatest motivator for first time buyers to buy is to set themselves up financially for the future by getting a foot in the property market door (59%), while over half (56%) would like to purchase a property where they can raise their family. The third largest motivation for first homebuyers is to avoid rising rent, which is making owning a property more attractive (44%).
The overall cost and financial benefits of home ownership are going to add weight to the decision but it seems that the more emotional factors such as where you envisage bringing up your children is very high on the influencing stakes.
Clearly, home ownership is still the dream for many Australians. However, it is important to feel confident in your financial future before taking on the commitment of a property purchase.
Other key statistics:
- Barriers: the three biggest barriers holding first homebuyers-to-be back from purchasing property are the rising cost of living impacting people’s ability to save a deposit (35%); rising property prices (25%) and the size of the deposit required to buy (12%).
- Buying in partnership: more people are planning to buy their first property with another person – those buying with a partner or spouse rose to 68% in the 2012 survey, up from 59% in 2011.
- Lender choice: the best deals are the key reason people choose a particular lender. In the 2012 survey, the top three answers for what future first homebuyers will base their lend choice on are, in descending order: they offer the best interest rates; they are the cheapest all around – interest rates, fees etc; they have the loan with the best features (these are the same top three results from the 2011 survey).
For more information contact Richard Windeyer on 1800 01 LOAN or click here to "Book a Meeting"