First home buyers are less focused on buying homes in popular areas, or areas close to their work, new research has found, suggesting that affordability challenges are making buyers “increasingly flexible”.
Westpac’s 2017 Home Ownership Report reveals the new trends of buyers looking to purchase their first home and what matters to them when shopping for their dream property.
The research, commissioned by Westpac in September, surveyed more than 1,000 Australian home owners and first home buyers and features trend data from the past two years.
The latest report shows that, in 2017, first home buyers are less focused than in previous years on buying a home in an area that is trendy or that is close to work.
Both options significantly decreased in the ranking of essential features, by 83 per cent and 48 per cent, respectively, compared to 2016.
Other features that have become less important in the decision-making process are: a quiet neighbourhood, access to public transport and safety.
These decreased by 37 per cent, 21 per cent and 9 per cent, respectively.
The head of home ownership at Westpac Group, Andy Wright, said that the research suggests that in the face of housing affordability challenges and rising household costs, first home buyers are becoming “increasingly flexible”.
It has become apparent, he said, that they are willing to shift their priorities in order to achieve their ultimate goal.
“These attitudinal shifts among first home buyers towards home ownership suggest we may see more looking to buy in areas that they hadn’t considered, with many previously thought ‘essential’ features now just ‘nice-to-have’,” Mr Wright said.
“In fact, the market saw home loans to first home buyers rise to a four-year high of 17.4 per cent in September of this year, which suggests we may be already seeing the positive results of these shifts.”
Mr Wright added that first home buyers are instead turning their attention to the inside of the home.
“Modern bathrooms and kitchens have become more essential, increasing by 25 per cent and 10 per cent, respectively, since 2016.”
1 in 5 buying homes with support from family or friends
The report found that nearly one in five first home buyers plans to support the purchase of their first home with help from family or friends, including guarantor loans.
It also found that home owner-occupiers are opting to maximise their current home and are increasingly (14 per cent since 2015) considering renovating. At the same time, those considering selling has decreased by 11 per cent compared to last year, bringing it back to the same level as 2015.
In addition, it revealed that most of those prioritising renovating (62 per cent) plan to use their savings as the main funding method, and 17 per cent of them will complement their savings with their home loan, possibly accessing equity.
The report defined first home buyers as those who intend to purchase their first home within the next two years.