First home buyers are paying more for their first home than expected, with record high property prices seeing many exceed their budget.
According to Finder’s First Home Buyer Report 2022, which surveyed 1,001 first home buyers in Australia, more than one-third of first home buyers (37 per cent) end up exceeding their budget.
The research found 8 per cent of recent first home buyers paid more than $100,000 over their budget, and a further 8 per cent paid between $50,000 and $100,000 more.
Just 20 per cent of first home buyers managed to purchase a property below their intended budget.
Money expert at Finder, Sarah Megginson said high property prices were partially to blame for first home buyers being stretched financially.
“We’re in a market where prices have skyrocketed, and wages can’t keep up with that level of growth,” she said.
“Many have been forced to spend more than they hoped.
“Unfortunately this will have consequences down the track on buyers’ ability to service their loans.
“It might seem impossible to find a home within your budget, but if you expand your location filters or look for a unit instead of a house, you can bring down the cost.”
Nearly half of buyers from NSW (41 per cent) and Queensland (40 per cent) exceeded their budget, compared to 31 per cent of Victorian buyers.
According to Finder, homebuyers with higher budgets were more likely to go beyond their initial limit.
More than half of buyers (53 per cent) with a budget above $1 million paid more than they had intended, including 28 per cent who spent more than $100,000 over their budget.
That’s compared to 37 per cent of those with a budget between $500,000 and $1 million and 29 per cent of those with a budget of less than $500,000.
