First time home buyers are searching for cheaper and smaller homes located further from city centres in an attempt to break into the housing market, a new survey has found.
According to the latest Bankwest/Mortgage and Finance Association of Australia (MFAA) research report, an increasing number of FHBs still wanted to break into the property market and were prepared to forego the lifestyle advantages of renting.
MFAA chief executive officer Phil Naylor said FHBs were resorting to a number of measures to enable them to enter the property market, such as looking for smaller properties or seeking out an older buildings rather than moving into a new home.
“The financial crisis has changed the aspirations of home buyers, 47.9 per cent of first time buyers are now looking to purchase a cheaper property than otherwise intended,” Mr Naylor said.
Of the 850 people surveyed, 31.3 per cent said they are looking for properties further from city centres.
Bankwest’s head of mortgages Dean Gillespie said the survey found 43.8 per cent of first time buyers are toning down their lifestyle and putting money aside in case the economy deteriorates.
“In contrast to claims that first time buyers are likely to default on their loans as interest rates increase, these figures suggest that first time buyers are saving to prevent that from occurring,” Mr Gillespie said.
“First time buyers are actively saving to protect themselves from an economic downturn, which suggests people are more strategic than they are given credit for.”
But for renters yet to break into the housing market, the sentiment is bleaker.
“The vast majority of renters say that renting is too expensive, with another 40.3 per cent saying that feel stuck in a rental rut,” Mr Gillespie said.
Mr Gillespie said about one in five renters were happy to keep renting so they could maintain their current lifestyle and avoid sacrificing home size, location and proximity.
“Some renters seem perfectly happy to continue renting, but they are clearly still in the minority.”