Challenge for the First Home Buyer

Even though you've been saving money every month for a down payment, it seems like costs are going up quicker than you can afford them.??

It feels like that old dance of “one step forward and two steps back”. Frustration keeps rising and you become disheartened.?

According to the Domains First Home Buyer Report young couples would need to put upward of 40% of their income toward mortgage repayment.?

Further, it has been shown that if Sydney buyers between the ages of 25 and 34 were to buy an entry-level home, 57.2% of their salary would go toward paying down their mortgage. However, buyers are approved for such loans.?

Melbourne purchasers purchasing an entry-level home at the 25th price percentile ($678,000) would have to pay back 45.4% of their salary.

The standard for measuring mortgage stress is 30% of income used for repayments. However, loans for entry-level homes in Canberra (48.3%), Brisbane (42.7%), Adelaide (42.1%), Hobart (40.3%), and Perth (31.2%) would all exceed this threshold.

According to the Chief of Research and Economist Dr. Nicola Powell, over the previous 5 years, the percentage of income required for entry-level homes increased by 18% points in the combined capital cities, and it increased by 7% points for apartments.

Even so, it would take the First Home Buyer six years and eight months to save up a deposit on a Sydney property. If they save a fifth of their monthly post-tax income, they will also need to save for 4 years and 6 months.

Saving time would be more than 5 years in Melbourne, Brisbane, Adelaide, and Canberra. Perth and Darwin had the shortest period, less than 4 years for houses and less than 2 years and 6 months for units.?

With the ABS data and research, it has been proved that high rent impacts savings and it is difficult for first-time home buyers to buy their home without help.

New Insight

According to new research from ABS, a quarter of renting households had an income of at least $140,000, as it is increasingly difficult to buy a first home without family help.?

High rents have impacted the buying of new homes. Also, AMP, chief economist Shane Oliver said that first-time home buyers face certain challenges. Moving ahead we will be focusing on the challenges for First Home Buyers.??

Key Hurdles for First Home Buyers

It was observed that getting a first-time house is becoming more and more dependent on parental resources. It can be from an inheritance, a direct cash gift, or just staying in the family home without paying rent. The average age of Australians purchasing their first home rose from 26 in the late 1960s to 31 in the mid-2010s, indicating a decline in the number of younger people making this decision.??

Let's examine the issues that first-time homebuyers face and find some answers to these typical issues.

• Savings for that deposit: The key to saving for that sizable deposit is to establish and adhere to a target early on. Every effort should be made to save money, and every move you take to reach your objective must be well-planned.

• Increase in property prices: Real estate in Australia is incredibly expensive, as everyone is aware. This reality is (understandably) one of the primary reasons young buyers struggle to buy their first property, according to a recent FHBA poll.

• Getting the right help: For first-time homebuyers, there are other helpful resources than buyer agents. Indeed, according to an FHBA survey, nearly 40% of participants said that mortgage brokers offered the most beneficial assistance when purchasing a property.

A good mortgage broker may give you access to a wide range of financing options and insightful guidance, making the process of obtaining a house loan easier. Having access to the right credit products will make getting a foothold on the real estate ladder more than just a pipe dream.

Call To Action

At Nfinity Financial, we recognize the challenges for the First Home Buyers. Our experts ensure smooth processing and the right information when it comes to purchasing a property so that you can make the right decision. To learn more about the First Home Buyer, call us at 0405 593 807 and schedule a consultation now! Schedule an appointment for further assistance. We aim to assist you!