Stressed, overwhelmed, anxious: Cost of living crisis hampers first-home buyer plans

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

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.

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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

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.

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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.