The past few years have been difficult for many first homebuyers – the proportion of FHB out of the total buyer market has slumped from 31.4% in May, 2009 down to 18% currently - and media may be partially to blame.
Banking industry researcher RFi’s latest report shows a number of reasons behind the trend, with lack of media reporting on government housing incentives top of the list.
“We have already seen how much of an impact the introduction of First Home Owner’s Grant Boost (FHOB) had on FHB numbers. Recently, however, many Australian states and territories have made changes to FHB incentives.”
According to RFi survey results, in December, 2009, 33% of potential FHB’s were from NSW – but by September, 2012 (following cuts to FHB incentives in the state), this proportion had fallen to 23%.
Conversely, in Victoria (where new stamp duty incentives were rolled out during this time) the number jumped from 27% to 40%.
In September, 2012, RFi says 61% of potential FHB’s agreed with the statement ‘I think the government should be doing more to help me afford a home,’ but when asked to identify the incentives on offer in their state, many struggled.
“This suggests that perhaps media reporting of government incentives, rather than the incentives themselves, may be impacting FHB intentions.”
However, RFi admits it’s not entirely the media’s fault, saying lenders also need to understand what FHB’s want in a home loan.
“Potential FHB’s are paying most attention to the fees attached to their loan, followed by the ability to overpay and the ease of understanding the mortgage process. The ability to overpay has consistently been valued by FHB’s, as it was both the most valued mortgage feature in December, 2009 and September, 2012 surveys.”
RFi says it’s important for the government and industry bodies to effectively communicate with FHB’s if this segment of the market is to improve.
“Changing economic conditions and government incentives are likely to continue to impact the FHB market in the future and it is important to have a strong understanding of this segment in order to adapt to their changing needs.”