New home buyers delaying overseas travel

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on March 08, 2019
New home buyers delaying overseas travel

Photo by Morre Christophe on Unsplash

Nearly half of all Australians who’ve recently bought a property are waiting more than three years before going on their next overseas trip, a survey found.

This is according to research by travel insurer InsureandGo.

According to InsureandGo’s survey, nearly three-quarters of mortgagees didn’t take an overseas trip in the first year of their home loan. 44% waited more than three years.

Tasmanians and Queenslanders were the biggest worry-warts – around 70% of buyers in Tasmania and 53% from Queensland waited more than three years before going overseas, while 37% and 40% did the same in West Australia and New South Wales respectively.

This figure was 44% in both South Australia and the ACT.

It also comes as no surprise only 10% can afford to head overseas within the first six months of buying – the average house prices across all major cities is $766,438, which is more than $150,000 for a 20% deposit.

At an interest rate of, say, 4%, monthly repayments on this home loan would be $3,236.

A single overseas trip can easily cost double this amount and then some.

Young people will not be stopped from taking their holidays
Despite the data showing 44% of people are waiting 3+ years for their first holiday after buying, this doesn’t apply to the younger generations.

Famed for their love of travel and spending on ‘experiences’ above all else, just 23% of people under 40 waited the same period of time before taking a holiday.

Comparatively, 70% of over 60s waited the full three years after a home purchase.

InsureandGo spokesperson Jonathan Etkind said this demonstrates the “clear priorities” younger buyers have when securing a home.

“Despite a property being one of the biggest investments someone will make in their lifetime, younger home buyers are not willing to compromise on travel,” Mr Etkind said.

“We forecast that travel will continue to be a leading consumer expenditure category regardless of how the property market fares in 2019.”

The Australian Bureau of Statistics Household Expenditure Survey, 2015-16 found the average household spent $77 a week on holidays – just over $4,000 a year.

People aged 15-24 spend roughly $58 a week on holidays – those aged 25-34 spend $53.

This is actually much less than other age groups. 55-64 year olds for example spend the most at $100 a week.

But this figure becomes much more relevant when you consider older age groups are more likely to have a higher income than younger age groups.

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William Jolly joined 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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