Streets Ahead : Streets Ahead Edition 12
7 First Homebuyers This was largely due to: • a reduction in the number of FHBs who believe now is a good time to buy a home • an increase in the number of FHBs expecting mortgage stress. The proportion of FHBs who believe it is a good time to buy a home fell to 50% (from 67% in September 2015) with confidence that property prices will only increase in the future (36%) being the main driver. The proportion of FHBs who have experienced mortgage stress has remained stable at 21%, with Western Australian respondents most likely (33% compared to the average of 21%) and Queensland and South Australian respondents least likely (15% compared to average of 21%) to experience mortgage stress. The higher cost of living (22%) and new job with less pay (19%) were the most common reasons. The proportion of FHBs who expect mortgage stress increased to 24% (up from 14% in September 2015). Western Australian respondents are most likely (33% compared to the average of 24%) and Queensland and South Australian respondents least likely (15% compared to average of 24%) to expect mortgage stress. The higher cost of living and interest rate rises (both 28%) are the most common reasons. Nathan McMullen explains why increasing rates are once again a concern for homeowners: “For an existing homeowner, the cost of homeownership has increased recently because interest rates have increased. We’ve had a sustained period of flat or declining interest rates. This is the first increase in repayments that some customers may have experienced for quite some time.” James Symond, CEO of Aussie Home Loans, suggests that consumer expectations may be preventing a lot of FHBs from entering the market: “Yes prices are high and it can be difficult for FHBs however their expectations are partly what also keeps some of these buyers from thinking they can secure the right property. Today the bar has been raised and with it, many FHB expectations. They want to live where they want to live”. Tim Brown, echoes this view on changing contemporary FHB expectations: “Most of this generation’s expectations are probably higher than previous generations, because they want everything now. Today as a FHB they’re expecting to live well above their means, and they all want to live in the city”. Following a peak of 102.1 in March 2015, First Homebuyer confidence fell to 98.4 in September 2015, and again to 93.0 in March 2016.
Streets Ahead Edition 11