The definition of a first home owner in Australia is not what it once was, according to a report released today by realestateVIEW.com.au.
The majority of first home buyers and owners (57.1% and 54.1% respectively) today are in their 30s and 40s. In contrast, just a quarter of first home buyers (25.7%) and one in ten first home owners (10.7%) are under 30.
The First Home Buyer Report – a national survey investigating the goals and opinions of 1,086 Australians comprising first home buyers (44.6%) first home owners (31.2%) and non-buyers (24.1%) – reveals affordability is playing a significant role in driving up the average age of first timers.
- Over a third (35.7%) have not bought because they think house prices are too high
- A further 30.3% want to save a bigger deposit – the next highest motivator for not entering the market
- One in 10 question whether now is the right time to buy
- 50.7% of first home buyers and 60.9% of first home owners have children – another sign of Australians taking longer to enter the market
“When we think of first time buyers we think of singles or couples in their twenties, but the reality is the road to achieving home ownership is longer and harder than it once was – you need a lot behind you and a good income in order to afford it these days, and that can take many years in the workforce,” General Manager of realestateVIEW.com.au, Petra Sprekos said
“The typical order of home ownership followed by kids is being flipped on its head.”
First home buyers bunkering down
The survey also revealed that Australia’s first home buyers are prepared to make significant lifestyle changes in order to save a deposit.
- Over half of first home buyers (53.1%) are cutting back on discretionary items like buying clothes
- Nearly half are cutting back on social outings (47.3%)
- 46.9% are holding off on big ticket items like cars and computers (46.9%)
- Over a third (38.5%) are forgoing holidays
- Interestingly, first time buyers under 30 are even more willing to make lifestyle sacrifices in order to save a deposit (60.1% are cutting back on social outings, 52.7% on discretionary items, 50.9% holding off on big ticket items and 41.6% forgoing holidays).
“It’s reassuring to see that first timers have the right attitude when it comes to securing a foothold in the market, but our research shows affordability will continue to be an issue long term,” said Ms Sprekos.
“The government was on the right track when they introduced stamp duty concessions for first home buyers, but the grants for buying a new home are far greater than for an established property. There’s definitely an opportunity for further intervention.”
Property still a key measure of success
Despite rising house prices, first timers still rank home ownership as the highest measure of success in adulthood, ahead of having a family, a successful career, travelling and owning a successful business.
The report also shows that despite speculation of a property ‘bubble’, first-timers have an overwhelming confidence in the property market. 76.8% of first home buyers and 78.3% of first home owners expect the market will deliver strong or moderate growth over the next 5-10 years, versus just 7.2% and 5.0% respectively who predict no or negative growth.
While property remains a life goal for many Australians, around a quarter (24.1%) are going against the grain and have made the decision not to buy property.
Among property ‘shunners’, home ownership rated much lower as a measure of success in adulthood compared with first home buyers and owners. Non-buyers rated this third behind having a family and travel/experiences, and just ahead of having a successful career and starting their own business.
Interestingly, over a third are shunning home ownership to allow for financial and lifestyle flexibility: 21.0% don’t want to be tied down by a mortgage and plan to spend their savings elsewhere, while 17.5% are avoiding buying to ensure a flexible lifestyle. Of those spending their savings elsewhere, 79.4% said they would be spending their money on holidays, and over a quarter (26.4%) would spend on discretionary items like clothing.
However, affordability is by far the main reason stopping people from buying a home (61.8% gave this as their main reason), while 15.1% refuse to buy because they can’t afford their ideal location.
“There’s a small sub-group of the market who are choosing not to buy and spending their money on life experiences rather than tying it up in mortgage, but for most non-buyers we can safely say that affordability is the key driver locking them out of the market,” Ms Sprekos said.