As rising property prices stretch homebuyers to the limit, more and more Australians are prepared to make compromises or sacrifices to get onto the property ladder, according to new research.
According to the research from non-bank lender Homeloans Ltd
, almost 42% of survey respondents – the majority of whom have already purchased their home – said they are willing to give up everyday luxuries such as buying lunch, going out for dinner or drinks, or subscribing to Pay TV.
However, the most favoured strategy, with almost half of all respondents, was starting a regular savings plan and putting in extra money when possible.
The research also found that would-be buyers would choose to live with their parents or in-laws (30%) or work more than one job (29%) to help save for a deposit. Around one-third (33%) of respondents took advantage of first home owner grants to help them achieve their dream of buying a home.
“For many people, owning their own home is a dream they are determined to make a reality, and our survey highlights the lengths some will go to,” Will Keall, national marketing manager at Homeloans said.
“Many are willing to streamline their social life or pull in their belts to grasp that first rung of home ownership.”
When it comes to the length of time it takes to save for a deposit, the survey found that four out of five respondents took over a year, with around 39% taking two years or more to come up with the required sum.
“A number said it took five years to have enough money for the deposit,” Keall says.
“This highlights how Australia’s high cost of living makes it challenging to save, and that property prices are stretching homebuyers to the limit.”
The amount of deposit obviously varies according to circumstances, needs and type of loan, but the majority of those surveyed had a deposit of between five and nine per cent. This was followed closely by a deposit of 10-14 per cent. A handful of respondents had a deposit ranging from 42-100 per cent.
Paying LMI was almost evenly split, with 51% saying they didn’t pay it and 49% saying they did.
What really stood out, according to Keall, was that the majority of homebuyers – whether baby boomers, Generations X or Y – purchased their first home before they turned 30.
This statistic was highest among those born in the 1970s (54.14%), while almost 44% born in that decade bought by the time they were 28.
Across all generations, around a quarter even bought their first home by the time they were 25. Those born in the 1980s were a little more gung-ho, with over 27% having bought their first home by 25.