Being stuck at home with housemates and parents during COVID-19 lockdowns has led to a surge in homeownership goals.
A new Westpac report shows the number of aspiring first home buyers has doubled since the start of the pandemic, with a desire for stability driving many young Aussies to ditch share house living for homeownership.
No longer wanting to pay rent was a major driver for purchasing a first home for 54% of young Aussies, followed by seeking more stability (39%) and financial security (37%) after the economic uncertainty brought on by COVID-19.
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Rate (p.a.)
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Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. If products listed have an LVR <80%, they will be clearly identified in the product name along with the specific LVR. The product and rate must be clearly published on the Product Provider’s web site. Monthly repayments were calculated based on the selected products’ advertised rates, applied to a $400,000 loan with a 30-year loan term.
Being cooped up at home during restrictions has also been a major factor, with 69% of those currently living with housemates, parents or in-laws now more determined to own their own home.
A third of aspiring first home buyers said a sense of independence was a major driver behind wanting to own a home.
“It’s encouraging that so many Australians are thinking about homeownership despite some of the challenges brought about by the pandemic," said Westpac’s Managing Director of Mortgages, Anthony Hughes.
"It’s also interesting to see this is now largely being driven by Gen Z, who after being cooped up at home during restrictions are now ready to leave their housemates or parents behind for a place of their own – many of whom might not have considered this a possibility prior to COVID-19," Mr Hughes said.
“Even though younger generations have been some of the most financially impacted this year, it’s positive that many have really used this time to take stock of their finances and get serious about their long-term goals.”
Factors like house prices, record low interest rates and the opportunity to live in a new area drive almost half (48%) of first home buyers to be more optimistic about entering the housing market than they were 12 months ago.
Almost half (48%) of Aussies believe that COVID has led them to reconsider the suburb or area they would like to live in, with that number increasing to 59% for younger Aussies.
Where first home buyers want to live in 2020
- Sydney – western suburbs located within 10km from the city centre, like Ashbury and Marrickville.
- Melbourne – eastern suburbs located 20-40km from the CBD, like Mitcham and Croydon.
- Brisbane – Brisbane CBD and inner-city suburbs up to 20km out, like Chermside and Zillmere.
- Adelaide – southern suburbs located about 10-20km from the CBD, like Bedford Park and Bellevue Heights.
- Perth – northern suburbs located within 10km from the city centre, like Dianella and Nollamara.
Mr Hughes said despite home buyer search activity being influenced by COVID, many first home buyers still want to be close to the city.
“While we’re seeing an increasing interest in properties that offer more space, there’s still a strong desire from first home buyers to live somewhere that’s still only about 20-30 minutes away from the CBD," he said.
“With a younger generation of buyers emerging, many are also weighing up areas that would enable them to maintain a certain lifestyle, like Sydney’s Inner West which is in close proximity to social hubs and nightlife, while also catering to changing needs like the ability to work from home more.”
Photo by cottonbro from Pexels
