First-home buyers facing fewer hurdles to getting onto the property ladder: Genworth
Conditions are improving for first-home buyers making their initial property acquisition, according to Genworth’s September Homebuyer Confidence Index.
While the index measuring first-home buyer confidence dipped slightly by 0.5 points to 98.5 it remains above the national average for all home buyers of 98.4.
It also found that half (54%) of surveyed first-home buyers believe it is a good time to buy a home, a figure that has more than doubled in the last two years.
Genworth also recorded a drop in potential first-home buyers who were deterred from buying because they were unable to save for a deposit (down from 30% in March to 11% in September 2012) or unable to afford repayments (down from 14% in March to 5% in September 2012).
First-home buyers also appear more comfortable with saving a smaller deposit and taking on a bigger mortgage debt.
Among first-home buyer respondents to the survey, 39% say they are saving less than a 10% deposit, compared with 34% who said so in the March survey.
First-home buyer affordability expectations by state
Click to enlargeSource: Genworth
However, the results show wide disparities in deposit comfort levels across states, reflecting different levels of affordability and sensitivity to interest rate cuts.
First-home buyers in Western Australia are most comfortable with a smaller deposit, with nearly-two thirds (64%) saving less than 10%, compared with just over a third of WA first-home buyers in the March survey.
Victorian first-home buyers are also more comfortable with a smaller deposit, with 44% saying they are comfortable with a 10% deposit.
The opposite trend was reported in NSW and Queensland.
The report also found that the proportion of surveyed recent first-home buyers who had experienced mortgage stress in the last 12 months fell from 16% in March 2012 to 13% in September 2012.
However, the proportion expecting difficulty in the coming year rose from 16% to 18%.
The Genworth reports also notes that changes to first-home buyer incentives offered in each state will mean this group will face different amounts of pressure in different areas in the future.
“Despite a slight fall in first-home buyer confidence, this segment of the market remains more optimistic that now is a good time to buy a home," says Genworth CEO Ellie Comerford.
“What is more heartening is that first-home buyers are increasingly confident they can save the deposit necessary to buy their first home.”
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