One in three Australian millennials thinks it will take them over 10 years to save for a house deposit, while 90% are concerned they won’t ever save enough money.
But the reality is quite different. Over two-thirds (69%) of millennial homeowners say it took them no more than five years to save for a house deposit.
Those are the findings from a study commissioned by ING which surveyed over 1,000 Australians aged between 18 and 39.
Melanie Evans, ING Head of Retail Banking, said the research found the current low-interest-rate environment is encouraging millennials to get into the market earlier, with 50% currently saving for a deposit and 58% of first homeowners already looking to move up the property ladder.
“With all-time low mortgage rates, homebuyers who can overcome the hurdle of a 20% deposit will likely find that servicing a loan is easier than ever,” Ms Evans said.
ING has been busy cutting its home loan rates, reducing rates on a number of its fixed rates hours ahead of the recent Reserve Bank board meeting, then cutting rates again after the RBA’s decision to reduce the cash rate to a historic low of 0.75%.
Stay up to date with the latest rate changes
SIGN UPCompromise is the key to getting on the first rung of the property ladder, with 55% of millennials who already own property saying they sacrificed on their wish list in some way.
Would-be buyers are less willing to make sacrifices, with only 38% saying they would be willing to compromise on the type of home and location to get a foot in the door.
Ms Evans said millennials have to be willing to make some sacrifices if they’re serious about owning a home.
“While many millennial Aussies believe that homeownership is a far off dream, our research has found that the reality of owning a home is far closer than they think. You just need to be willing to make some small sacrifices in the first instance to save for that deposit and compromise on the type of home you’re willing to take on to kick off your homeownership journey.
“There’s no need to put pressure on buying that ‘dream forever home’ for your first property, as you can always upgrade later. In fact, our research shows that 58% of millennial homeowners are already on the move up the property ladder.”
Of the wish list items millennials are willing to compromise on, dream location (36%) and storage space (21%) are the top two.
The research also found over a third (35%) of millennial homeowners had trouble understanding home loan applications.
Over a third (37%) of millennials own their own home, while 40% rent and one fifth (20%) live with their parents.
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