Saving for a home deposit can be a tricky prospect, involving self-discipline, long-term goal setting, and sacrificing those little luxuries like eating out, going to live gigs, or indulging in weekend getaways.
New research by Westpac into the financial trends of Australian renters during COVID-19 shows that government-enforced lockdowns, coupled with the closure of many businesses that rely on discretionary spending, has prompted 33% of those surveyed to start saving for a home.
“We’re finding the restrictions really are encouraging some aspiring buyers to hit their savings goals and buy their first home,” says Anthony Hughes, Westpac’s managing director of mortgages.
“More time at home has meant many people have been able to cut back on their regular spending and instigate some positive habits, as well as think about longer term goals like home ownership.”
60% of the 1176 renters surveyed by Westpac admit that COVID helped them realise they spend too much on unnecessary items, with 69% further claiming this period has changed the way they plan to manage their finances in the future.
“These behavioural changes, coupled with the historically low interest rate environment and recently announced government initiatives, like the HomeBuilder program, means we’re seeing a lot of interest from the first-time buyer category despite the economic uncertainty,” Hughes adds.
The very nature of the lockdown meant that, for many renters, perceptions of what makes for an ideal home have also shifted.
19% say that time working from home has meant a study area has leapt to the top of their ‘wants list’, while 27% now see a backyard as a necessary feature.
“Study areas are in more demand, although having a dedicated study typically comes with a higher price on a property,” Hughes says.
“So, I think you’re also going to see people getting creative about how they convert little nooks and crannies in their homes into nice little functional workspaces.”