The HomeStart Finance first home home buyer index, first conducted in October 2015, shows confidence tracking downwards with growing fear among prospective home owners about their capacity to save for upfront costs and to meet mortgage repayments, if they do manage to get into the market.
The survey of more than 750 home buyers has found confidence fell by 15.5 per cent from April to September this year, despite improving sentiment about the affordability of property.
This positive was outweighed by plummeting sentiment about buyers’ capacity to save for upfront costs (down 24.2 per cent) and increasing pessimism about job security (down 13.7 per cent).
Buyers were also losing faith in their capacity to meeting home loan repayments, despite the low interest rate environment. Sentiment in relation to this factor was down 12.4 per cent.
A third of first home buyers believe it will take them more than five years to save a deposit, with about 60 per cent believing it will take them more than three years.
“In contrast, 44 per cent of home owners (who bought their home before the year 2000) reported that it took them about a year or less to save a deposit,” the index report says. “This again, confirms the divide that is growing between home owners and first home buyers.”
HomeStart Finance CEO John Oliver said the index showed first home buyers were finding it more difficult than ever to get into the housing market despite low interest rates.
“The amount of money required for a home deposit and other fees and charges, such as stamp duty, are consistently highlighted as factors that prevent potential first home buyers from entering the market,” he said.
“The ability to save enough money to cover upfront costs is made more difficult by rising costs of living, a concern that was also expressed by first home buyers through the index.
“The majority of first home buyers also felt that even if they were able to break into the market, they would find it difficult to manage mortgage repayments given the high costs of living.”
Oliver said South Australia’s unemployment rate was impacting on first home buyer sentiment, with only 20 per cent of survey respondents feeling secure in their employment.
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