Nearly two-thirds of first-home buyers are feeling pessimistic about the current property market, with 56% citing the cost of living crisis as affecting their plans to purchase a home, new research shows.
The latest Property Seeker Survey by realestate.com.au shows buyers are feeling stressed, overwhelmed, anxious, or nervous about the buying process, with more first-home buyers experiencing these emotions than upsizers, downsizers, and investors.
Only 20% of first-home buyers believe it’s a good time to buy property, although they do think it’s a more favourable time for selling or investing.
The primary factor delaying first-home buyers is the cost-of-living crisis, closely followed by property prices.
Top reasons for first-home buyers to delay purchasing a property
| 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-home buyers have paused their plans due to economic concerns and rising interest rates.
Alarmingly, 41% of first-home buyers feel their financial situation has deteriorated over the past year, compared with 31% who say it has improved.
A significant factor impacting first-home buyers' finances is the proportion of income spent on rent or, if they have recently bought, their mortgage payments.
Two out of five first-home buyers are spending more than 30% of their income on rent or home loan repayments, putting pressure on their financial position.
More first-home buyers are fed up with renting and are looking to purchase. Image: Getty.
On a brighter note, more first-home buyers expect their financial situation to improve in the next 12 months.
Interest rates and property prices are key factors influencing whether first-home buyers will purchase in the next year.
More than half believe interest rates will remain high in the next 12 months, and more than two-thirds think property prices will stay elevated.
The main reason first-home buyers want to enter the property market is to stop renting.
Top reasons for first-home buyers to want to own a property
| 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 sentiment has grown since last year, reflecting the challenges faced by renters.
Record-low rental listings, heightened competition, and high weekly rents have driven many renters to pursue homeownership.
One in four first-home buyers aim to invest in property to generate wealth and seek a better quality of life.
Wanting more space for a growing family is also a significant motivator for first-time buyers.
During the past year, more first-home buyers have had to look further, afield as they could not afford properties in their current or nearby suburbs.
First-home buyers are prepared to renovate a run-down property in order to get on the property ladder. Image: Getty.
A third of respondents were considering moving to regional or remote areas to afford a home.
Others were thinking about high-rise apartment living to get on the property ladder.
Renovating a fixer-upper was an option for more than a quarter of first-home buyers, as was rent-vesting – buying an investment property while continuing to rent a home.
The survey results indicate that first-home buyers are struggling to afford property due to financial constraints, with their challenges worsening year after year.
As a result, they are lowering their expectations and compromising on location, property size, and even the number of bedrooms.
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