First home buyers’ hopes of breaking into the market have jumped dramatically but their biggest concern is housing affordability.
Just over half, 51 per cent, of first home buyers were planning to buy property in the next 12 months, compared to 38 per cent in the second quarter of last year, according to ME’s fourth quarterly property sentiment report.
Ninety-two per cent of respondents agreed that housing affordability was a big issue in Australia, up from 89 per cent late last year.
This follows Australia’s housing market "severely unaffordable" ranking with Sydney ranking third and Melbourne fourth compared to 309 cities internationally.
And other perceived worries eased–to the lowest point since the survey of 1000 Australians in the property market began midway through 2019–including concern over negative equity, having to pay interest only loans and tight credit policies.
ME general manager Andrew Bartolo said first home buyers have a “fear of missing out”.
“Rising property prices carry the risk of squeezing first-home buyers out of the market, however they also signal a healthier market that presents a worthwhile long-term investment,” he said.
“In the case of first home buyers, the recent property price recovery has likely nudged them to get in while they can–as though it’s ‘now or never’–and has created a sense of FOMO.”
“Low interest rates and commentary in the market for the support of first home buyers may have also contributed to an increase in home-buying intentions.”
The report also tracked the perception of choice in the property market and found almost half (46pc) of total respondents believe there is not enough choice, with this figure jumping to 57 per cent among first home buyers.
“Housing supply has picked up slightly, but with prices rising and demand outweighing supply, there’s no wonder that almost one in two Aussies don’t think there’s enough choice available,” Bartolo said.
“With so many first home buyers planning to buy in 2020, yet most stating choice in the market is a barrier, addressing this issue should be a focus in the year ahead.
“Considering a combination of market factors including the buzz of home value growth, a solid spring selling season, plus rate cuts and signs from the RBA that rates will stay lower for longer, it’s no surprise overall property sentiment has improved.”
