RealestateVIEW.com.au’s First Home Market Report, the result of a national survey s of over 1,000 Australian first home buyers (44.6%), first home owners (31.2%) and non-buyers (24.1%) found the definition of the first home owner in Australia is not what it once was.
The majority of first home buyers and owners (57.1% and 54.1% respectively) now in their 30s and 40s with kids.
Demographics of First Home Buyers
First home buyers are not the young singles/couples we once thought.
- The majority of first home buyers (57.1%) today are in their 30s and 40s.
- The number of first home buyers in their 30s in Victoria (38.4%) was higher than the national average (33.4%) and of that in NSW (29.3%).
- Interestingly, NSW had a higher proportion of buyers in their 40s (26.1%) than the national average (23.7%) and Victoria (21.3%)
Affordability is an issue
Not surprisingly the report also revealed that affordability is playing a significant role in driving up the average age of first timers, and that many are prepared to make significant lifestyle changes such as cutting back on discretionary items and social outings in order to save a deposit.
However despite rising house prices, first timers still rank home ownership as the highest measure of success in adulthood, ahead of having a family, a successful career, travelling and owning a successful business.
Interestingly, it was a different story for non-buyers – while property remains a life goal for many Australians, around a quarter (24.1%) are going against the grain and have made the decision not to buy property, with over a third of non-buyers shunning home ownership to allow for financial and lifestyle flexibility.
While the federal and local governments have introduced stamp duty concessions and grants for buying new homes in to combat affordability, there is an opportunity for further intervention.
Some of the recommendations the report makes include:
- Increase the first home owner grant (on a national and state level) for established properties
- Increase the value of dwellings that the stamp duty concession currently applies to
- Bring back the first home savers account scheme (abolished from 1 July 2015)
Why are they buying?
Maybe reality renovation shows like The Block and House Rules creating a ‘renovator’s market’? Here’s the reasons survey participants gave for buying:
- For first home buyers, their main motivation for purchasing property was having the freedom to renovate (36.8%) – ranking higher than the security of owning their own home (35%), because they believe property is a good investment (14.1%), or because they view home ownership as a major financial aspiration (11.0%).
- Interestingly, NSW first home buyers were the only group who didn‟t rank renovations as their main driver. The security of owning a home was the most important at 41.8%.
- While first home owners named security/stability and financial aspiration as their main motivation for a buying a home, almost one fifth (18.8%) said they bought because they wanted to the freedom to renovate.
- •Similar to first home buyers, the security/stability of home ownership was much more important for NSW first home owners (56.4%) when compared with Victorians (40.7%) and the rest of the nation (42.9%).
By the way…
I’ve found that first home buyers haven’t really gone, instead many have become renting investors – they’re just buying for investment rather than owner-occupation – as explained by John McGrath here.
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