Sep 27, 2019 | ,

Changing First Home Buyers

The Genworth FHB Sentiment Report, conducted in June and July across 2,000 prospective FHBs and 1,000 recent FHBs, showed that rather than pursuing the traditional Australian dream of owning a property for a lifetime, survey participants have “a more pragmatic approach” to enter the market with an “entry level” property and upgrade down the road.

Among the 72% of prospective first home buyers across Australia who think that now is a good time to buy, those in Perth were the most optimistic. Perth respondents – 82% of them agreed with that statement, compared to 75.1% in Melbourne and 73.6% in Sydney.

The largest reason behind first home buyers believing now is a good time to buy was that they were simply at that stage in life where they wanted to own their own home (58.5%). Forty-six percent of first home buyers also said that low mortgage interest rates made it a good time to buy. Around one in three (32.3%) prospective FHBs plan to sell their first property within five years, with the trend even more pronounced in Sydney (39.5%) and Melbourne (36.3%).

As a result, free-standing homes are being overtaken by small apartments as the most popular property among FHBs, with investment properties also becoming more prevalent among those looking to enter the market. One in six prospective FHBs plan to buy an investment property as their first home, as compared to one in ten among the recent FHB respondents.

In order to capitalise on the opportunity seen in the current market, around 60% of prospective FHBs plan to buy now with less than a 20% deposit as compared to the 47.4% of recent FHBs who bought their first property with less than a 20% deposit.

With this changing face of first home buyers – considerations are needed when choosing a loan such as converting this first home to an investment in the medium to long term. The loan structure becomes vital so the owner has options in the future which will not negatively impact their tax benefits. To find out how best to achieve this, feel free to give me a call – and as always, we would refer you to speak with your accountant regarding investment & tax implications/advice.

Individual circumstances must always be considered. If you would like some help in assessing your situation and determining your best options, contact me on 0418 903 954 or donna-lee@celsiusfinance.com.au

warm regards,
Donna-Lee Parkes