Confidence among first home buyers dropped again in the first quarter of 2016, with two leading industry figures pointing to changing consumer expectations as a contributing factor.
According to the 12th edition of Genworth’s Streets Ahead report, FHB confidence fell to 93.0 index points during the March quarter from 98.4 points in the September 2015 quarter, following a peak of 102.1 points in the March 2015 quarter.
Genworth said the decline was largely due to a reduction in the number of FHBs who believe now is a good time to buy a home (down from 67 per cent to 50 per cent) and an increase in the number of FHBs expecting mortgage stress (up from 14 per cent to 24 per cent).
Aussie Home Loans CEO James Symond said consumer expectations may also be preventing a lot of FHBs from entering the market.
“Yes, prices are high and it can be difficult for FHBs. However, their expectations are partly what also keeps some of these buyers from thinking they can secure the right property,” he said.
“Today the bar has been raised and with it, many FHB expectations. They want to live where they want to live.”
Tim Brown, Yellow Brick Road’s CEO of lending, echoed Mr Symonds’ view on the expectations of the contemporary FHB.
“Most of this generation’s expectations are probably higher than previous generations because they want everything now,” he said.
“Today, as FHBs, they’re expecting to live well above their means and they all want to live in the city.”
[Related: FHBs jostle with investors]