First homebuyers sacrifice to save a house depositPosted on Wednesday, October 09 2013 at 11:28 AM
The majority of first homebuyers believe they’ll only need to save for one to two years for their property deposit, according to a new report.
The 2013 Mortgage Choice Future First Homebuyer Survey studied more than 1000 Australians planning to purchase their first home.
The results show about one quarter of future first homebuyers are saving an average of 10 per cent of their monthly incomes after tax – similar to 2012 when property prices were generally lower.
Mortgage Choice spokesperson Jessica Darnbrough believes it’s surprising first homebuyers aren’t saving more, given almost one third of respondents are also concerned rising real estate prices.
“If Australians are serious about getting on the property ladder, they need to knuckle down and start saving a deposit sooner rather than later,” Darnbrough says.
A staggering 83 per cent of respondents say they’re prepared to sacrifice aspects of their lifestyle in order to get into the market, with 64 per cent indicating they’d ditch a holiday to save their pennies and raise a deposit sooner.
Another 24 per cent say they’re comfortable with delaying having children, while 19 per cent would move in with parents or in-laws to save cash. Eight per cent also say they’re willing to move to cheaper share accommodation.
The survey results are slightly at odds with the recent 2013 Housing Affordability Sentiment Index (HASI) compiled by property portal realestate.com.au.
The latest HASI shows the perception of affordability improving across the country, with all states and age groups recording an increase in sentiment towards the cost of housing over the past 12 months.
According to HASI, first homebuyers and generation Y are driving the result, with 46 per cent of those looking to purchase being first-timers. That’s compared with a much lower 28 per cent this time last year.
Generation Y are the most positive would-be buyers, with 45 per cent of respondents expecting their financial position to improve over the next six months.
Highlighting the positivity of this generation, 14 per cent say they already own both an investment property and a home – a significant increase on 2012.
Justine Davies is the finance editor for ratings organisation CANSTAR and says it’s encouraging to see a significant jump in first homebuyers looking to crack the market.
“To me, that indicates there’s a real feeling now that homeownership is becoming more affordable, in part due to low interest rates that are boosting consumer sentiment,” Davies says.
“As well as low rates though, there’s also the fact that Gen Y are getting older, with a greater proportion settling into their careers and, as the HASI found, feeling financially confident.
“That confidence is translating into a willingness to enter the property market.”
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