Almost two-thirds of first-time home buyers feel negative about the property market right now. A recent study shows that 56% of them say the rising cost of living is impacting their plans to buy a home.
Rising costs hinder first-home buyers’ plans,
The latest Property Seeker Survey from realestate.com.au reveals that many buyers are feeling stressed, anxious, or overwhelmed during the process.
Moreover, first-home buyers experience these emotions more than upsizers, downsizers, and investors, which is significant.
Currently, only 20% of first-time buyers think it is a good time to purchase property, which is concerning.
However, they believe it is a better time for selling or investing, indicating some market optimism.
The main reason delaying first-home buyers is the ongoing cost-of-living crisis, which affects their financial situation significantly.
Additionally, rising property prices are closely following as a major factor in their decision-making process.
Main reasons first-time buyers are postponing property purchases
| Reason | % of respondents |
| Cost of living | 56% ↑ |
| Property prices | 53% ↑ |
| The economy | 49% ↑ |
| Increasing interest rates | 49% ↑ |
| Supply / availability of property | 42% ↑ |
| Slowing interest rate hikes | 25% ↑ |
| Anticipating a change a government (i.e. upcoming elections / change in government) | 21% ↑ |
Half of first-time home buyers have delayed their plans because of economic worries and rising interest rates, which is concerning.
Alarmingly, 41% of these buyers feel their financial situation has worsened over the past year, indicating significant stress.
In contrast, only 31% report that their financial situation has improved, showing a troubling trend among first-home buyers.
A major factor affecting their finances is the amount of income spent on rent or mortgage payments if they recently purchased.
Currently, two out of five first-home buyers spend over 30% of their income on rent or home loan repayments.
This situation places additional pressure on their financial well-being, making it even harder to plan for homeownership.
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On a positive note, more first-time home buyers anticipate that their financial situation will improve in the coming year.
Interest rates and property prices are crucial factors that will influence whether these buyers make a purchase in the next year.
More than half of first-home buyers believe that interest rates will stay high over the next 12 months, which is important.
Additionally, over two-thirds think property prices will remain elevated, adding to their concerns about entering the market.
The primary reason many first-home buyers want to enter the property market is to stop renting, which is understandable.
This desire reflects a need for stability and ownership in their living situation, highlighting their long-term goals.
Main reasons first-time buyers want to own a home.
Reason | % of respondents |
| No longer wished to rent | 36% ↑ |
| Desire for wealth creation (e.g. investment in property) | 24% |
| Seeking better quality of life | 23% |
| More space / growing family (having kids / more kids) | 17% |
| Wanted a better property / wanted to upgrade | 14% ↓ |
| The expected increase in prices over the coming period (i.e. the projected rise in property value) | 12% |
| New job / changed job / salary change | 12% |
| Want a fresh start | 12% ↑ |
| Moving out from parents’ home | 12% ↑ |
| Moving in with your partner / spouse | 10% ↑ |
This feeling has increased since last year, showing the difficulties renters are facing in the current market.
Record-low rental listings, heightened competition, and high weekly rents have pushed many renters to seek homeownership as an alternative.
One in four first-time home buyers intends to invest in property to build wealth and improve their quality of life.
Additionally, wanting more space for a growing family is another significant reason for first-time buyers to seek homeownership.
Over the past year, many first-home buyers have had to look farther away because they cannot afford homes in their neighborhoods.
In fact, a third of respondents are considering moving to regional or remote areas to afford a home.
Others are thinking about living in high-rise apartments as a way to get onto the property ladder.
Renovating a fixer-upper has become an option for more than a quarter of first-home buyers, which is interesting.
Similarly, rent-vesting—buying an investment property while continuing to rent—has also gained popularity among first-time buyers.
The survey results indicate that first-home buyers are struggling to afford properties due to ongoing financial constraints, which is concerning.
As a result, they are lowering their expectations and making compromises regarding location, property size, and even the number of bedrooms.
