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." 

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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.

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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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