A new report has revealed 32% of Millennial home buyers will look to buy a home within the next two years.
ING's new 'Future Focus: Homeownership report' found almost half (46%) of this group said COVID-19 had made home ownership more achievable.
Millennials said they used the lockdown to get on top of their property goals, by moving travel budgets to a home savings account (59%), taking on a side hustle (37%), and moving back in with their parents (36%).
The report found in order to save and buy a house sooner, half of all millennial home buyers said they would consider living on the city fringes and the outer suburbs (45km or more from the city).
More than one in five (22%) said they plan to buy a smaller property in a cheaper area and rent it out until they can afford their forever home, while one in 10 (9%) said they would consider buying a property with a friend or family member to get on the ladder quicker.
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.
The report also found Millennials were making significant sacrifices and using different tactics in order to achieve their homeownership dream.
Almost half (48%) said they would limit their personal shopping, reduce dining out experiences (42%) and recreational drinking (28%), give up their gym membership (21%), and date less (24%).
ING’s Head of Home Loans Julie-Anne Bosich said the pandemic had galvanised the younger generation's resolve to own a home.
"What this research suggests (is) millennials and Australians in general haven’t given up on the great Australian dream of owning their own home, they’re just re-thinking how they go about getting there and re-evaluating where they might want to live," Ms Bosich said.
“It suggests many people, especially millennials are being savvy by taking advantage of record low interest rates, government assistance and a weakened housing market to get on the property ladder.”
The Great Australian Dream
The report found more than half (61%) of the nation's adult population thought home ownership was important right now.
Low interest rates (39%), a more affordable housing market (33%) and new government schemes (32%) were all key factors contributing to a sense that buying a home in the post-COVID market was more achievable than it was previously.
Australians looking to buy within the next two years said they were tired of renting (45%) wanted greater stability and security (22%), and recent events had shown them the importance of getting into the market to protect their future (19%).
Rather than holding out for their next home or planning a property portfolio, it appears Australians were setting more realistic homeownership goals to get on the ladder sooner.
Most people were setting their sights on owning one home (68%), with few people wanting to purchase an investment property (8%) or flip a house for profit (5%).
The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:
- The big four banks are: ANZ, CBA, NAB and Westpac
- The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Credit Union Australia, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
- The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
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.
In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.
*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may inﬂuence the cost of the loan.
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