First home buyers reprioritised what matters when buying their first home: Westpac

First home buyers have significantly reprioritised what matters most when searching for their ideal home, according to the Westpac’s 2017 Home Ownership Report.

The research, commissioned by Westpac in September, surveyed over 1,000 Australian home owners and first home buyers, and features trend data from the past two years.

The latest report demonstrates in 2017 first home buyers are less focused on buying a home in an area that is trendy or close to work, with both significantly decreasing in the ranking of “essential features” by 83 percent and 48 percent respectively, compared to 2016.

A quiet neighbourhood, access to public transport, and safety are features that have also become less important during the decision-making process, with each decreasing by 37 percent, 21 percent and 9 percent respectively.

Andy Wright, Head of Home Ownership for Westpac Group, said in the face of housing affordability challenges and rising household costs, the research suggests first home buyers are becoming increasingly flexible and willing to shift their priorities in order to achieve their ultimate goal.

“These attitudinal shifts among first-home buyers towards home ownership suggest we may see more looking to buy in areas that they hadn’t considered, with many previously thought ‘essential’ features now just ‘nice-to-have’,” Wright said.

“In fact, the market saw home loans to first home buyers rise to a four year high of 17.4 percent in September of this year, which suggests we may be already seeing the positive results of these shifts, combined with government incentives in New South Wales and Victoria.”

First home buyers are turning their attention to the inside of a home instead, as modern bathrooms and kitchens become more essential, increasing by 25% and 10% respectively since 2016.

Nearly one in five first home buyers plan to support the purchase of their first home with help from family or friends, including guarantor loans.

Meanwhile, home owner-occupiers are opting to maximise their current home and are increasingly considering renovating, growing 14 percent since 2015. The number of those considering selling a home has decreased by 11 percent compared to last year, bringing it back to the same level as 2015.

“Our data shows that home owner-occupiers are increasingly choosing to focus on improving their current home rather than selling and relocating,” Mr Wright said.

The majority of home owners (62 percent) prioritising renovating plan to use their savings as their main funding method to renovate, and 17 percent of home owners who are dipping into their savings will complement this with their home loan, possibly accessing the equity they’ve built up.

“No matter what your housing priorities are in the next year, it is important to do thorough research, make a realistic plan, and consider the best pathway to purchase that suits your individual situation,” Wright said.

“At Westpac, we have specialised home lending experts available to chat to anyone considering their next move. We’re committed to helping our customers with information and products that are best suited to their needs, and personalised advice based on their circumstances.”

KEY TRENDS AND FINDINGS:

 Among first home buyers, many aspects of a property’s location have become less essential since 2016:

o Trendy (3% in 2017 vs 15% in 2016)
o Proximity to work (25% in 2017 vs 48% in 2016)
o A safe area (67% in 2017 vs 2016 73%)
o Access to public transport (37% in 2017 vs 2016 47%) o Quiet (36% in 2017 vs 2016 56%)

 Among first home buyers, modern bathrooms (45% in 2017 vs 36% in 2016) and kitchens (44% in 2017 vs 40% in 2016) are increasingly considered to be essential

 Trends among home owner-occupiers who are considering a house-related action:
o Renovating up by 14% since 2015 (33% in 2017, 30% in 2016, 29% in 2015)

o Selling a home down by 11% since 2016 (18% in 2017, 21% in 2016, 18% in 2015)

 Pathways to purchase:
o 17% of first home buyers will complement their primary funding method for the purchase of their first home with help from family and friends

o 62% of home owners considering renovating plan to use their savings as their main funding method

o 17% of home owners will complement their savings with their home loan, possibly accessing the equity they have built up