According to Westpac, the number of first home buyers looking to enter the property market in the next five years has significantly increased, rising from 7 per cent in 2019 to 16 per cent in 2020.
The research, commissioned by Westpac and conducted online by Lonergan Research between 20 October and 2 November 2020, asked 2,088 Australians over the age of 18 their home buying intentions.
It found that the number of Australian adults looking to purchase their first property before 2025 had substantially risen since COVID-19.
The key drivers for these potential home buyers – largely young Australians under the age of 30 – were ‘no longer wanting to pay rent’ (54 per cent), ‘seeking more stability' (39 per cent) and ‘financial security’ (37 per cent).
Further, nearly half (48 per cent) of first home buyers were found to be more optimistic about entering the housing market than they were 12 months ago due to factors like house prices (38 per cent), low interest rates (24 per cent) and the opportunity to live in a new area (24 per cent).
As well as financial triggers, the survey found that time spent living in close quarters with others during restrictions had also been a motivating factor, with nearly 70 per cent of those currently sharing a roof with housemates, parents or in-laws, determined to get a foot on the ladder more quickly.
Just under a third (32 per cent) of prospective buyers were also seeking a sense of independence through home ownership.
According to Westpac’s managing director of mortgages, Anthony Hughes, the research ultimately showed that young Australians are increasingly seeking the sense of independence and stability that home ownership provides.
“It’s encouraging that so many Australians are thinking about home ownership despite some of the challenges brought about by the pandemic,” he said.
“It’s also interesting to see this is now largely being driven by Gen Z, who – after being cooped up at home during restrictions – are now ready to leave their housemates or parents behind for a place of their own, many of whom might not have considered this a possibility prior to COVID-19.”
He said: “Even though younger generations have been some of the most financially impacted this year, it’s positive that many have really used this time to take stock of their finances and get serious about their long-term goals.”
The research also found that COVID-19 had made nearly half (48 per cent) of potential home buyers reconsider the type of suburb or area they would like to live in. Looking closer at age groups, Gen Z surpassed the national average, at 59 per cent.
In Sydney, prospective first home buyers identified inner western suburbs as locations they want to buy in, such as Ashbury and Marrickville.
Melbourne’s eastern suburbs have also attracted attention from young home seekers, particularly eastern suburbs located 20-40km from the CBD, like Mitcham and Croydon.
Similarly, Brisbane’s inner-city suburbs up to 20km out like Chermside and Zillmere, as well as its CBD, have been identified as desirable locations for home buying.
In Adelaide, southern suburbs located about 10-20km from the CBD, such as Bedford Park and Bellevue Heights, are considered hotspots, as well as Perth’s northern suburbs located within 10km from the city centre, like Dianella and Nollamara.
“While we’re seeing an increasing interest in properties that offer more space, there’s still a strong desire from first home buyers to live somewhere that’s still only about 20-30 minutes away from the CBD,” Mr Hughes said.
“With a younger generation of buyers emerging, many are also weighing up areas that would enable them to maintain a certain lifestyle, like Sydney’s inner west, which is in close proximity to social hubs and nightlife, while also catering to changing needs like the ability to work from home more.”