The economic impact of the COVID-19 pandemic has forced a majority of first home buyers (FHB) to scuttle plans to buy property.
According to a new survey from Gateway Bank, more than two-thirds of FHBs say they have delayed or abandoned plans to purchase a property because of the pandemic.
The survey also revealed that around half of Australian FHBs have tapped into their deposit savings during COVID-19. Paying for day-to-day expenses is the highest ranked reason (45%), followed by providing assistance to a family member experiencing financial stress (17%). Additionally, a whopping 16% of potential first home buyers have already used most of their deposits.
Of those FHBs who have accessed their deposit savings and have had their plans delayed or halted by the pandemic, more than half (56%) say it will now take them roughly one to three years longer to save for a deposit, and a quarter (25%) expect they will be saving for at least an additional three more years.
“As more people are being forced to spend their deposit savings on basic living expenses, the prospect of buying a property is now even more elusive,” said Lexi Airey, chief executive officer of Gateway Bank.
“However, the dream of home ownership remains alive for the vast majority of Australians, even if it is going to take longer to realise. Some first home buyers are taking advantage of Government Schemes in a bid to circumnavigate the need for a 20% deposit.”
Airey said that FHBs should actively consider the assistance available to help them enter the property market, especially for those unaware of the full spectrum of government schemes. The research showed that only 56% of respondents were aware of First Home Owner Grants, just 32% were aware of the First Home Loan Deposit Scheme and around 24% were aware of Stamp Duty Concessions and the First Home Super Saver Scheme. Notably, 22% are not aware of any government schemes.
“These schemes and other options such as Lenders Mortgage Insurance or a Family Guarantee are designed to help first home buyers purchase their property sooner,” said Airey. “Awareness of these measures is generally quite low, and those looking to enter the property market for the first time could be missing out on an opportunity to put their pre-COVID home ownership plans back on track.”
