Home ownership continues to be a widely held aspiration in Australia, providing owners with security of housing tenure and long–term social and economic benefits.
According to the 2016 Census of Population and Housing (Census), there were nearly 8.3 million households in Australia.
Where household tenure was known:
67% (5.4 million households) were home owners:
32% (2.6 million households) without a mortgage
35% (2.9 million households) with a mortgage
32% (2.6 million households) were renters; where landlord type was known:
26% (2.1 million households) were renting from private landlords
3.7% (300,000 households) from state or territory housing authorities
1.3% (105,500 households) from other landlords
1.0% (79,000 households) were other tenure, including households which are not an owner with or without a mortgage, or a renter (ABS 2017c).
In more recent times, there has been much public debate about the rate of home ownership and housing affordability. The number of first home buyers looking to enter the market has more than doubled since last year, according to a Westpac survey.
The numbers suggest that first home buyers looking to enter the property market in the next five years has increased from 7 per cent in 2019 to 16 per cent in 2020.
The research, commissioned by Westpac and conducted online by Lonergan Research between 20 October and 2 November 2020, asked 2,088 Australians over the age of 18 their home buying intentions.
It found that the number of Australian adults looking to purchase their first property before 2025 had substantially risen since COVID-19.
The key drivers for these potential home buyers – young Australians under the age of 30 – ‘no longer wanting to pay rent’ (54 per cent), ‘seeking more stability' (39 per cent) and ‘financial security’ (37 per cent).
Further, nearly half (48 per cent) of first home buyers were found to be more optimistic about entering the housing market than they were 12 months ago due to factors like house prices (38 per cent), low interest rates (24 per cent) and the opportunity to live in a new area (24 per cent).
Where do first home buyers want to live?
While working remotely has become the norm for many who are in a position to do so, Westpac found there’s still strong sentiment to live in relatively close proximity to CBD’s across the country.
Those considering property in Sydney and Perth are inclined to purchase within 10km of the city centre. First home buyers bound for Adelaide or Brisbane are looking at homes up to 20km out of the CBD, while Melbournian buyers are considering purchases as far as 40km away from the city.
Westpac’s managing director of mortgages, Anthony Hughes said an emerging younger generation of buyers is leading this trend of staying tied to metropolitan life.
“Many are weighing up areas that would enable them to maintain a certain lifestyle, like Sydney’s Inner West which is in close proximity to social hubs and nightlife, while also catering to changing needs like the ability to work from home more,” he said.
While lifestyle factors are important, average suburb prices should always be kept mind as they can change quite dramatically depending on a few kilometres distance.
For example, the average price for a two bedroom house in the Inner West suburb of Leichhardt is $1.2 million, with one bedroom apartments going for $687,000 according to Domain data. Then in Campsie – just 7km south-west – those prices drop to $778,000 and $490,000 respectively.
If you are a first home buyer seeking advice on your borrowing power or if you have already saved a handsome deposit and need finance for your purchase, give our friendly team a call on 02 8313 8400.
*Information within this publication has been sourced from Mozo.com.au, Mortgage Business University of Sydney Research, Westpac Bank and Australian Institute of Health & Welfare.