Three in four prospective first home buyers believe now's a good time to buy: Genworth

Three in four prospective first home buyers believe now's a good time to buy: Genworth
Three in four prospective first home buyers believe now's a good time to buy: Genworth

The Australian dream is seeing first home buyers seek to buy a small apartment and trade up within five years, according to the Genworth First Home Buyer Sentiment Report.

The Report based on a survey undertaken in June and July 2019, of 2,001 prospective first home buyers and 1,008 Recent first home buyers across Australia, reveals that almost three in four prospective first home buyers believe now is a good time to buy their first home, with one in two citing recent “falling property prices” as the primary reason.

Many are keen to capitalise on the 8.4% decline in median house prices since 2017 with three in five (~60%) planning to buy now with a less than 20% deposit compared to just under one in two (47.4%) Recent first home buyers who bought their first property with less than a 20% deposit.

To bridge the deposit gap Genwroth found, three in four (75.1%) are proposing to apply for the Federal Government’s ‘First Home Loan Deposit Scheme’; 27.5% are purporting to ask their parents or family for assistance and 15.8% are planning to use lenders mortgage insurance.

Three in four prospective first home buyers believe now's a good time to buy: Genworth

They said, "those numbers are in line with many other first home buyers with roughly 70% reporting that they did not fund 100% of their deposit from their own savings."

"The majority (56.9%) of these relied on parental or family assistance (via gifts, guarantees and loans) to supplement their deposit. Lenders mortgage insurance (LMI) was also a popular option with more than one in three (35.6%) Recent first home buyers using LMI to secure a home loan with a less than 20% deposit."

"Whilst parental and family support is understandable, the increasing use of parental guarantees is cause for concern given the “knock-on” effect in the event of a borrower default," Genworth added.

Three in four prospective first home buyers believe now's a good time to buy: Genworth

One in three (32.3%) prospective first home buyers plan to sell within five years - more than double the proportion of recent first home buyers (15.8%) – reflecting a more pragmatic approach to entering the market sooner by purchasing an “entry level” property and trading up in a few years. 

Download a copy of The Genworth first home buyer Sentiment Report for September 2019. 

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