First home buyers aren't giving up

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on February 07, 2020
First home buyers aren't giving up

Photo by Kinga Cichewicz on Unsplash

Young Australians haven't admitted defeat in their quest to buy their first home, with new data showing they're quietly optimistic.

A survey of more than 1,000 Australians aged 18-25 by Lendlease has revealed eight in 10 of them dream of owning their own home, while almost half of them (47%) think they'll achieve that dream within the next five years. 

Overall, 79% of them think they will eventually own their own home. Of this 79%: 

  • One in six think they'll buy by the end of next year; and
  • Another third are confident they'll buy before the end of 2025

Lendlease Managing Director of Communities Matt Wallace says 2020 is the year for first home buyers to enter the market. 

"Not only are interest rates still near record lows, but first home buyers are able to take better control of their finances with a range of industry initiatives designed to help them out," Mr Wallace said. 

"We understand the many challenges facing first home buyers and are ready to help them get their foot on the property ladder." 

Looking to compare low-rate, variable owner-occupier home loans? Below are a handful of low-rate loans in the market.

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
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
ZERO APPLICATION FEESFEE FREE OFFSET
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
  • The shorter your loan, the less interest you pay in the long run.
ZERO APPLICATION FEESFEE FREE OFFSET

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
  • The shorter your loan, the less interest you pay in the long run.
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
NO APPLICATION FEES
  • 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
NO APPLICATION FEES

Yard Home Loan (Principal and Interest) (LVR < 80%)

  • 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
NO UPFRONT OR ONGOING FEES
  • 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
NO UPFRONT OR ONGOING FEES

Owner Occupier Accelerates - Evaporate (LVR 60%-70%) (Principal and Interest)

  • 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
NO UPFRONT OR ONGOING FEES
  • 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
NO UPFRONT OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 80%)

  • 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
UNLIMITED EXTRA REPAYMENTS
UNLIMITED EXTRA REPAYMENTS

Basic Home Loan (Principal and Interest) (LVR < 60%)

    Variable
    More details
    EASY DIGITAL APPLICATION
    EASY DIGITAL APPLICATION

    Neat Variable Home Loan (Principal and Interest) (LVR 70%-80%)

      Variable
      More details
      $0 APPLICATION FEE
      $0 APPLICATION FEE

      Budget Home Loan (Principal and Interest) (LVR < 80%)

        Variable
        More details
        100% FULL OFFSET ACCOUNT
        100% FULL OFFSET ACCOUNT

        Offset Package Home Loan (Principal and Interest) (LVR < 60%)

          Variable
          More details
          LIMITED TIME OFFER
          • Fast turnaround times, can meet 30-day settlement
          • No ongoing or monthly fees, add offset for 0.10%
          • Extra repayments + redraw services
          LIMITED TIME OFFER

          Smart Booster Home Loan Discounted Variable - 1yr

          • Fast turnaround times, can meet 30-day settlement
          • No ongoing or monthly fees, add offset for 0.10%
          • 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 June 28, 2022. View disclaimer.

          Indeed, 25% of young Australians think 2020 is the time to enter the property market, while 30% are more confident in buying in the next 12 months compared to the past 12 months. 

          That's despite the median house price continuing to rise in the latter half of 2019 to more than $545,600 nationally, according to CoreLogic. 

          Interestingly, young Australians are skewed more towards building a new home (58%) than buying an existing one (42%), while the main reasons for buying included: 

          • Having a place to call their own (69%) 
          • Independence (52%) 
          • Raising a family (50%)
          • The security a home provides (49%) 

          How are they saving? 

          Saving for that initial deposit was identified as one of the most challenging obstacles, with 55% listing it as a struggle on the path to home ownership.

          This makes sense considering a 20% deposit on that national median price of $545,600 is nearly $110,000.

          To combat this lofty goal, Lendlease's research identified the top five ways young Australians are saving for a house deposit, with one in five supposedly "saving hard": 

          1. Cutting back on small expenses (e.g. cafes, eating out, etc.): 45%
          2. Saving money with their partner: 45%
          3. Opening a specific savings account: 36%
          4. Sacrificing a luxury expense (e.g. holiday, new car etc.): 35%
          5. Starting a side hustle: 24%

          Lendlease social trends researcher Claire Madden was full of praise for the aptitude young Australians are showing in saving for a home. 

          “Despite Gen Y and Z growing up with the rhetoric of rising housing and living costs, they are showing an optimism and resilience in holding onto the great Australian dream of home ownership," Ms Madden said. 

          "Over four in five in our younger generations have the desire to own a home, and almost two in five are extremely or very optimistic that it will become a reality.

          "Whilst saving for the deposit is seen by many as the biggest obstacle, these tech-savvy, agile and entrepreneurial generations are switched on to new opportunities and are likely to embrace the home-ownership deposit schemes and find a way to see the dream realised."

          "Ok Boomer" 

          Despite the optimism of young Australians, the sentiment towards older Australians, aka "boomers", hasn't really improved much. 

          According to the participants, 79% of them believed the challenge of buying a home today is more difficult than it was for their parents' generation.


          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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          William Jolly joined Savings.com.au as a Financial Journalist in 2018, after spending two years at financial research firm Canstar. In William's articles, you're likely to find complex financial topics and products broken down into everyday language. He is deeply passionate about improving the financial literacy of Australians and providing them with resources on how to save money in their everyday lives.

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