Everyone seems to have something negative to say about young adults looking to purchase their first homes. “They’re entitled and spend too much of their earnings to save for a deposit,” are commonly heard sentiments. But it turns out that younger first-home buyers know what sacrifices need to be made to gain a foothold on the property ladder. They’re also willing to start from the bottom and work their way up.
Not only are younger first-home buyers willing to give up living in ideal suburbs, they’re also willing to compromise on the type of home. New research by Westpac indicates that four in five young Aussie homeowners prioritise staying within budget as the most important consideration when looking for a property. This is up 5% from last year—proving that younger first-home buyers can be as practical as their older counterparts.
With exorbitant house prices and deposits, particularly in the east coast capitals of Sydney and Melbourne, many first-time homebuyers are learning how to play the cards they’re dealt.
According to John Flavell, CEO of Mortgage Choice, it wasn’t affluent, middle-aged Australians with lots of equity in their homes who were precluded from buying properties by APRA’s new lending restrictions, but younger first-home buyers. “The sad thing is they got squeezed out first. The tighter credit affects people at the margins, and that is the group of people who have been disadvantaged,” he said.
To gain a foothold on the property ladder, Flavell recommended first-home buyers adapt accordingly.
“Once again, maybe Bernard Salt is right. Maybe the accommodation equivalent of smashed avocado on toast is ‘I want to live in a funky apartment within a 10km radius of the CBD’. And maybe they should actually go for a vegemite on toast, which is an apartment which was built in the 60s and is 35 or 40 kilometres out of the CBD,” he said.
“You can go into the suburbs, even in Sydney which is our most expensive market, and you can still find yourself an apartment for under $500,000 — if you’re prepared to have vegemite on toast and travel for an hour [to get to work]. But that is kind of what you have to do.”
Whether it’s proximity to the CBD or an apartment with a garage, first-home buyers need to sacrifice some of their non-negotiables if they want to stay on-budget and buy their first homes.
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