Survey finds young property seekers favour new homes over existing properties

Renowned property developer Lendlease released a survey which detailed first home buyer sentiment and concluded that many young Australians are taking steps towards attaining their first home in 2020. A study by McCrindle on behalf of Lendlease interviewed 1005 Australians aged between 18-40. It revealed 8 in 10 people believed they would own a home in future, with almost half (47%) commenting that they are looking to buy within the next five years. The survey also found a majority of young Australians (58%) would be more inclined to buying or building a new home, over an existing home (42%).

Further positive sentiment found that young home seekers were feeling confident in the market, with 25% believing 2020 is the right time to buy a home, and 30% claiming that they would be in a better position to purchase over the next 12 months, than the past year. You could attribute the resurgence of optimism among buyers to several reasons. However, the underlying driving factor behind the desire to own a home is said to be because young Australians want ‘a place to call home’. And rightly so.

To gain a more in-depth understanding of the results of the survey, we reached out to Ben Christie, Head of Residential Developments at Lendlease, who provided us with more insight into both the incentives and hindrances for buyers. Ben also shared some valuable advice for buyers looking to break into the market over the next 12 months.

Urban.com.au: The Lendlease ‘Young Aussie Home Ownership’ Home study found that 8 in 10 Australians dream of owning their own home, yet only 25% believe 2020 is the year to buy. Why do you think that is? What changes can be made within the property industry to change that perception?

Ben Christie: We know that affordability is a key challenge for young Australians looking to purchase their first home, particularly in the major cities. To help young Aussies get onto the property ladder, across the industry we’re seeing a number of additional incentives made available, beyond the Federal Government’s First Home Buyer Scheme. At Lendlease we’re offering first home buyers up to $10,000 off selected lots at a number of our communities, including Alkimos Beach, Alkimos Vista, Aurora, Atherstone, Elliott Springs and Harpley.

U: 58% of respondents decided that they would prefer a new home over an existing one. What do new homes offer that existing properties do not?

BC: New homes can offer greater flexibility in home design, and the chance to be part of a thriving community with lots of available amenity. We find that first home buyers looking to purchase outside of the major cities value the mix of access to urban living and nature that a new community can provide. This gives them the best of both worlds at a more affordable entry point to the property market.

U: What do you think are the key factors preventing young Australians from buying property?

BC: Our research into homeownership amongst young Australians found that the dream is still very much alive for many, however a key obstacle is saving for a home deposit. Yet despite this, our study found that many young Aussies are still optimistic about owning a property in the next three to five years.

U: Do you believe it is more likely that buyers are facing issues with raising capital or that buyers are wary of servicing a mortgage?

BC: Securing a big enough deposit, and raising the capital needed is an issue for many young would-be property purchasers. Our research found that to bolster savings for a deposit, many young Australians are saving hard by cutting back on smaller luxuries such as eating out, larger luxuries such as holidays, and almost one quarter have started a ‘side hustle’ to help get the funds together. 

U: The survey also found that many Gen Z respondents would choose a location which allowed them to live more sustainably. Since buyers are becoming more discerning about living an environmentally conscious lifestyle, do you think developers are responding to this demand?

BC: Yes, absolutely. At Lendlease, we are committed to leading the evolution of our industry to be truly sustainable environmentally, socially and economically. Providing a sustainable environment for our purchasers is fundamental to our vision to create the best places, places for people today and for generations to come. Lendlease is recognised as an international leader by the Global Real Estate Sustainability Benchmark with five Lendlease managed funds ranked number one in the respective global or regional categories, in 2017.

U: The First Home Loan Deposit Scheme only supports 10,000 loans each financial year. Do you believe that this is enough to cater to the volume of applications?

BC: The government’s First Home Loan Deposit Scheme is a positive scheme and we hope it will provide a number of first home buyers with the opportunity to get on the property ladder. It’s also been an effective initiative to get the topic of homeownership back on the agenda and inspire many developers to look at ways to make property more affordable and deliver extra value, for the First Home Buyer market.

U: What advice would you have for buyers who dream of securing property but don’t yet have the funds raised for a deposit?

BC: Our research data would have you believe the answer is to start a ‘side hustle’ or engage in other creative ways to save for a deposit! Whatever the saving mechanism is, it’s important to be realistic about what you can afford and research the available offers and incentives that may be able to help with costs. Many developers have compelling initiatives right now so buyers should make sure they understand the different options and assess these together with the value of buying from a trusted developer that delivers on promises and prioritises amenity.

U: What should first home buyers look for in a new home?

BC: First home buyers looking to purchase a new home should look for a location that offers the amenity they need. This may include cafes and other retail options, as well as schools, childcare services, good infrastructure and transport links. Those who want to live, and raise a family, amongst nature, should look at quality master-planned communities that offer plenty of open green space, including walking and biking trails, and parks, together with the important elements of an urban lifestyle, at a more affordable price.