Reduced first home buyer numbers and cost of living pressures for mortgage holders are dragging homebuyer confidence down.
The Genworth Homebuyer Confidence Index dropped by 1.6 points from September 2013, with 49 per cent of respondents citing cost of living as the key driver for mortgage stress.
The proportion of those who thought now was a good time to buy a home fell from 46 per cent in September 2013 to 42 per cent in March 2014.
“The high cost of living has remained the number one cause of mortgage stress for homeowners since September 2011,” said Genworth Australia chief commercial officer Bridget Sakr.
“While 71 per cent of first home buyers consider the dream of homeownership to be realistic, this group continues to struggle to save for a deposit,” continued Ms Sakr.
The results suggest that around three out of 10 prospective first home buyers believed it would take four years or longer to save a 20 per cent deposit, compared to 60 per cent of all respondents who thought it would take them at least four years to save a deposit.
“The struggle to enter the property market may also be exacerbated by any future dwelling price growth,” Ms Sakr said.
The index, based on a survey of over 2,000 consumers, looks at the proportion of monthly income borrowers use to service debts, their repayment history over the last 12 months and expectations for the next 12 months.