Nearly 40% of first home buyers who have entered the property market in the last two years have had to sacrifice when it came to the location they bought in.
Figures from Mortgage Choice’s latest First Home Buyer Survey show 37% of respondents said they couldn’t buy exactly where they wanted to, up from 34.7% in the 2015 survey.
Mortgage Choice chief executive officer John Flavell
said there was no real surprise that such a large proportion of first home buyers have to give up on their ideal location.
“While it must be very disheartening for first home buyers to struggle to buy in the area they want, it isn’t a surprising phenomenon,” Flavell said.
“Generally speaking, first home buyers will want to buy in an area that is close to family, friends and work. However, in most cases, these are generally the more expensive areas,” he said.
Of the first home buyers who were forced to buy in a different location than they would’ve liked, 82.5% said it was because they were priced out of the area.
Given the low interest rate environment that currently exists, Flavell said saving for a deposit is likely the biggest challenge first home buyers face, especially in markets such as Sydney and Melbourne where median dwelling prices sit north of $500,000.
While he said first home buyers who budget diliegently may be able to save enough for a deposit on their dream home, Flavell said a change of mindset from home buyer to investor may also be beneficial.
“Property can be a great investment and, once in the market, home owners might find it easier to purchase a property in their desired area,” he said.
“First home buyers need to think sensibly when buying property, and understand that while they cannot afford their dream home today, that doesn’t mean they won’t be able to afford it in the future.”