Around 67% of first home buyers said they would be willing to compromise on certain requirements to buy property in the current market, according to new research by home loan lender, ME.
In a market where prices continue to surge, the research suggests that many first home buyers are reassessing their selection criteria and what they can afford to buy.
Outside financial support measures, the top compromises include purchasing a smaller than preferred property, selecting a less than preferred area or choosing a property that needs renovations or repairs.
|Top first home buyer compromises|
|First Home Buyers|
|Purchasing a smaller than preferred property||35%|
|Purchasing with less than 20% deposit which means paying Lenders Mortgage Insurance||27%|
|Getting financial support from family / having family act as guarantor||26%|
|Purchasing in a less preferred area||25%|
|Purchasing a property that needs renovations or repairs||24%|
|Buying an investment property to rent out before buying my first home||16%|
|Buying ‘off the plan’ to purchase a property not yet built||13%|
|Buying property with family and friends||11%|
|Other, please specify:||3%|
In fact, only a third of those in the property market under 40 years’ say they’ve purchased their ‘forever home’ − a place where they’d stay for a long time (20 years+) − proving that many first homeowners are buying their first home as a stepping stone.
“Getting into the current market can be challenging, but can become easier once you make compromises,” explains Head of Home Loans and Persona Banking, Claudio Mazzarella.
“Sometimes, it’s just readjusting your mindset on what your ideal first home looks like. You could be otherwise cancelling out some good buying opportunities.
“The most important thing to remember is that once you’re on the property ladder, you can benefit from the rising value and equity in your home that could help you upgrade down the track.”
In addition to the type of home, Mazzarella highlighted that first home buyers that took a flexible approach to coming up with a 20% deposit would get ahead.
“There is a strong perception that young buyers are locked out the market, but once you get a budget and stick to it, it’s a lot easier to achieve your home ownership journey. We live in a society of instant gratification and even simple lifestyle changes make a difference.”