Frustrated first home buyers swap housemates for home ownership

author-avatar By
on November 23, 2020
Frustrated first home buyers swap housemates for home ownership

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.

Buying a home or looking to refinance? The table below features home loans with some of the lowest variable interest rates on the market for owner occupiers.

Lender

Variable
More details
UNLIMITED REDRAWSSPECIAL OFFER
  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
UNLIMITED REDRAWSSPECIAL OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
Variable
More details
AN EASY DIGITAL APPLICATION
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
AN EASY DIGITAL APPLICATION

Neat Variable Home Loan (Principal and Interest) (LVR < 60%)

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
Variable
More details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES
  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
Variable
More details
NSW/VIC/SA METRO & INNER REGIONAL AREAS$5000 CASHBACK. T&Cs APPLY.
  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
NSW/VIC/SA METRO & INNER REGIONAL AREAS$5000 CASHBACK. T&Cs APPLY.

Variable Home Loan (Principal and Interest)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services

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%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of May 24, 2022. View disclaimer.

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

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

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author-avatar
Emma Duffy is Assistant Editor at Your Mortgage and  Your Investment Property Mag, which are part of the Savings Media Group. In this role, she manages a team of journalists and expert contributors committed to keeping readers informed about the latest home loan and finance news and trends, as well as providing in-depth property guides. She is also a finance journalist at Savings.com.au which she joined shortly after its launch in early 2019. Emma has a Bachelor in Journalism and has been published in several other publications and been featured on radio.

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