Some insights into what first home buyers are likley to do

First home buyers in Western Australia are set to dominate the country’s property market, following new insights from one of Australia’s biggest comparison websites finder.com.au[1].

finder.com.au commissioned a leading global research provider pureprofile, which surveyed more than 1,100 respondents across Australia.

It found that WA first home buyers were by far the most determined to purchase their first property, with 90 percent making it their New Years’ Resolution for 2014.

This compared to 77 percent of first home buyers in South Australia, 64 percent in Victoria, 60 percent in New South Wales and 54 percent in Queensland.

According to the Australian Bureau of Statistics (ABS) data crunched by finder.com.au,Western Australians have more first home buyers than other states in proportion to all home loans financed.

For instance, WA first home buyers made up 23 percent of all home loans financed in August. It was also the second-highest number of first home buyer loans in the country, with 1,745 in WA, closely following Victoria with 2,105 in August.

Michelle Hutchison, spokesperson for finder.com.au, said first home buyers outside of Western Australia are facing even tougher competition.

“It’s already difficult for many first home buyers to enter the property market because they are generally earning less money, have smaller deposits and competing against refinancers and property investors.

“On top of this, 63 percent of borrowers would consider purchasing property interstate and with such fierce determination from Western Australian first home buyers, those in other states now have to face the prospect of being kicked out of the market from their interstate rivals.”

The finder.com.au annual survey also found that Western Australians are the least accepting of older ‘kids’ staying at home with their parents, only 14 percent thinking it’s ok to still live at home if you’re over 28, compared to the rest of Australia, one in five of whom think it’s perfectly fine.

Despite this, of those still living at home, more first home buyers in WA are living at home to save for their deposit (70%).

Queensland and South Australian first home buyers are finding it the hardest to save enough money for a deposit, with 62 percent in each state saying this is the main reason why they haven’t yet bought a home.

QLD first home buyers are the most independent, as they are the least likely to be living at home while saving for a deposit (31 percent). Almost one in three (31 percent) Queenslanders think 21 is the limit to mooching off of mum and dad while 76 percent of the rest of Australia think it’s ok to still live at home after turning 21.

More first home buyers in NSW (60 percent) plan to buy an investment property over residential for their first home, compared to the other states. While QLD first home buyers are more willing to purchase property interstate (69 percent) than first home buyers in other states.

 

First home buyer profiles

NSW first home buyers: biggest sponges but ready to invest

New South Wales first home buyers are living at home the longest than any other state, with 16 percent believing it’s ok to live with your parents over the age of 30. About half are living at home to save for a deposit.

They are more likely to make their first property purchase an investment (60 percent), particularly Gen Y with 64 percent wanting to invest in property. And they are also looking for long-term capital growth (71 percent).

It’s no wonder two in three first home buyers living in NSW would purchase interstate, as property prices are among the most expensive in the country. However, they are still optimistic, with 79 percent believing now is a good time to enter the property market.

VIC first home buyers: future thinkers but behind the times

The vast majority (89 percent) of Victorian first homebuyers are planning to invest in property to set up their future and about two in three (62 percent) want a long-term capital growth.

However, Victorian first home buyers rely the heaviest on newspapers and magazines more than other states to learn about the home loan market, instead of the internet and comparison websites.

They are also optimistic about buying, with 72 percent thinking now is a good time to enter the property market.

QLD first home buyers: Most daring property investors with help from parents

Queensland first home buyers are the most daring property investors, with over two-thirds (69 percent) considering to purchase interstate. Over half (55 percent) are looking for long-term capital growth and the majority (82 percent) want to set themselves up for the future.

Half of QLD first home buyers head out of the nest from 25, and receive more help by their parents than any other state. Thirty-one percent will be given money to help with their deposit or their parents will go guarantor.

SA first home buyers: highest optimism and savviest bunch

South Australians have the most savvy first home buyers in the country, with almost all (92 percent) using the internet and comparison websites to research the home loan market. They are also more likely to get advice from a mortgage broker too.[sam id=36 codes=’true’]

They have the highest optimism with 85 percent believing now is a good time to enter the property market, however they are the most concerned about lenders not passing on rate cuts.

South Australian first home buyers who are  looking to invest in property are more likely to go hard with a riskier or short-term investment than any other state, as 67 percent want good rental yield as opposed to long-term capital growth.

WA first home buyers: Most determined buyers

Western Australian first home buyers are the most determined bunch in the country, with 90 percent making it their New Years’ Resolution to buy a property in 2014.

WA first home buyers are more inclined to get home loan advice from family and friends as well as listen to the radio and watch TV more than other states.

They are serious about investing in property, with half of all WA first home buyers planning to invest in property and of which, 80 percent are looking for long-term capital growth. More than half (60 percent) would also consider purchasing interstate.

Mrs Hutchison said that all first home buyers need to be prepared before jumping into the home loan market, or face rejection.

 “The property market is only going to get tougher for first home buyers, no matter which state you live in. So make sure you are prepared before you start looking to buy property.

“Compare home loans online at finder.com.au to find a good value deal and then apply for pre-approval so you’re ready with a budget that you can afford. It will also mean you will save time when you’ve found the property you want.”

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Michael is a director of Metropole Property Strategists who create wealth for their clients through independent, unbiased property advice and advocacy. He's been once agin been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


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