First home buyers willing to compromise on space to buy
Fresh data has found that more than one in four first home buyers are prepared to compromise on space, in order to get a foothold into the Australian property market.
Mortgage Choice and Core Data’s Evolving Great Australian Dream whitepaper discovered 27.6 percent of first home buyers would be happy to buy a small dwelling in order to get into the market.
According to Mortgage Choice chief executive officer, John Flavell (pictured), the Great Australian Dream of homeownership is becoming increasingly difficult, with property prices climbing across many different markets, specifically Sydney and Melbourne.
“First home buyers understand that buying property is difficult and they may not be able to buy the exact home they want, or exactly where they want,” Flavell said.
“That said, first home buyers are, on the whole, very financially savvy and they see the benefit of getting their foot on the property ladder sooner rather than later. As such, they are prepared to use different home buying strategies to make their property purchase goals a reality.”
Another popular purchasing strategy amongst first home buyers was buying in the outer suburbs or further away, with 25% of respondents saying they would employ this tactic.
“Our data shows that one in four first home buyers are willing to buy in the outer suburbs or further away from where they would prefer to live. These properties are likely to be cheaper and more affordable, and while this may appear to be a trade-off, it will be worth it in the long run,” he said.
“Once you have built up adequate equity in your property, you can then upgrade and renovate or buy a bigger and better property.”
A third strategy that first home buyers were likely to use was seeking financial support from family, which could take the form of a monetary gift or having a parent go guarantor on a home loan.
“The challenge for first home buyers these days is saving a sufficient deposit. As such, it is no surprise to see a significant number of first home buyers stating that they would look for financial assistance from family in order to make their property goals a reality.”
Flavell added that it was important for first home buyers to remember that property was a long-term investment.
“It is undeniably tough for first home buyers to get onto the property market, but it is not impossible. At the end of the day, property is a long-term investment that will require buyers to take various steps before they can own their ideal home,” he said.
