First home buyers may be making a comeback, with a recent survey revealing that one in five first home buyers intend to buy their first property within the next three to six months.This is up from one in eight in 2013 and the highest the survey has seen.
The survey, conducted by RAMS, found that low interest rates were the main reason behind the optimism. More than three in four first home buyers in the survey said that the low rates had encouraged them to look at property.
Although, 70% of first home buyers said they would still be looking to enter the market if rates were higher, suggesting interest rates are not the only driving factor.
First home buyers are also more optimistic about being able to service their home loans. Close to half (49%) think they will take 15 years or less to pay it off, up from 43% in 2013. This may be because they have been saving more and for longer. Forty-four percent of respondents have been saving for a deposit for two years or more, compared to 41% last year. Furthermore, 48% of first home buyers requiring a loan have been saving more than 20% of their household income for a deposit, compared to 46% last year.
RAMS CEO Martine Jager said these finding illustrate how the first home buyer market is changing and evolving.
“We believe this finding really highlights the focus and determination of FHBs. There is a recognition amongst the group that they need to get on that property ladder, they recognise the importance of that first step and making it sooner rather than later. Something we are seeing amongst our customers at RAMS,” she said.
The survey also found that the average age of first home buyers continues to increase. More than 41% of respondents were aged 36 or above, up from 30% in 2013. While those aged 25 or below has fallen, dropping from 27% 2013 to 18%.
“The profile of the first home buyer is changing, the demographics are different to what they were two, five and ten years ago. We are seeing more women, more single people and more 30 somethings enter the market,” Jager said.
“We’re also seeing first home buyers are buying their home for different reasons, with more investors in the market than ever before.”
High property prices were the main barrier preventing first home buyers from entering the market with almost half (49%) saying prices affected their decision. This was followed by saving for a deposit (48%).
