Research released by digital bank UBank has revealed that 44 per cent of Millennials in Australia list purchasing property as one of their top two savings goals over the next five to seven years, which is an increase of 3 per cent since February.
Of those Millennials aspiring to get on to the property ladder, 50 per cent said they are currently saving for a deposit.
Among other age groups, 34 per cent of Generation X and 36 per cent of Generation Z list buying a property as one of their top two savings goals.
Commenting on the biannual Know Your Numbers survey, Ubank executive Philippa Watson said that while the coronavirus pandemic has increased the financial uncertainty for many aspiring home owners, it has encouraged them to adopt positive financial behavioural changes.
“Despite 45 per cent of the population admitting their finances have been negatively impacted in the last six months, we’re seeing Millennials emerge as being quite resilient,” Ms Watson said.
“They’re taking the opportunity to implement budgeting and saving strategies to keep their financial goals, such as buying a home, on track, with many putting away half their salary each month.”
However, the research, based on a survey of 1,065 Australians, found that 80 per cent of aspiring home owners feel undereducated when it comes to saving for, or purchasing, property, which increased to 86 per cent for Millennials.
“Owning a home is still a major goal for Aussies, especially young Aussies,” Ms Watson said.
“But our research shows some knowledge gaps that could cost borrowers thousands and add unnecessary years to the repayment process.”
Among those who do not own a home, 80 per cent said they have more to learn about home loans, mortgages and saving for a home, with 31 per cent saying they do not know where to start and 21 per cent saying they do not know how much they need to save.
Those who do not budget (43 per cent) are twice as likely to feel like they do not know where to begin when it comes to saving for a home loan, compared with those who do budget.
Meanwhile, 35 per cent of home owners have admitted that they do not know the fees associated with their home loans.
Ms Watson said that while now might not be the appropriate time for everyone to buy a home, it might be a good opportunity for some to enter the market or consider refinancing to benefit from record-low interest rates.
“Just 20 minutes of homework into comparative rates and fees could see thousands put back into Aussie pockets over the life of a home loan and help make the dream of owning a home within reach,” she said.
“We encourage anyone who is considering taking out a home loan or refinancing to get in touch. Pick up the phone or jump online and use the tools at your disposal to take the next step.”
The research also found that 68 per cent of Millennials have a budget, compared with 58 per cent of Generation X, 59 per cent of Baby Boomers and 55 per cent of Generation Z.
An additional 11 per cent of respondents said they have started using budgeting applications or trackers during the current period of economic upheaval, increasing to 20 per cent of Millennials.
“We know there’s a direct correlation between budgeting behaviours and reaching your financial goals, and it’s really impressive that so many younger Australians are being intentional around their money,” Ms Watson said.
Half of all Australians said they have minimised all of their spending outside necessities in response to the pandemic, while 10 per cent have made one or more investments to increase their money (17 per cent among Millennials).
Recent research commissioned by MyState showed that a third of Australians have had to dip into their savings during the COVID-19 crisis to make ends meet, with 23 per cent of this group originally saving for a deposit for their first home.
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Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.
Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.