We certainly have seen an increasing number of younger people out and about looking for property of late. With government first home buyer grant still available, lower interest rates and a flattening of home prices this is the opportunity to for first home buyers to get into the market.
Higher Rents Encouraging Generation Y to Purchase First Home
MANY renters are buying their first home rather than fork out for exorbitant rent, new research shows.
First home buyers are dipping their toe back into the market while prices and interest rates are low.
New research has revealed they are more confident about buying a house now than they were six months ago.
Rising rents is one of the key factors that has first-time buyers considering if it is time to take the plunge.
Latest CBA/Mortgage & Finance Association of Australian research has found that current high rents mean two-thirds of first-time home buyers were re-evaluating the trade-off between renting and buying. It found about 17.2 per cent of first-home buyers were planning to enter the housing market sometime in the next 12 months.
But almost 70 per cent say they are still holding back due to the fear of servicing higher debt mixed with a fear of future job redundancies.
I remember buying my first home and I certainly had concerns about the commitment decision I was making. Never the less I jumped in and took that plunge and have not looked back since.
Some analysts spruke that it is more beneficial to rent long term if you can put the same amount of a mortgage repayment and holding costs of a home each month into other investments like the stock market! Provided you are disciplined can get cheap rent and if the stock market was always heading north, this could be the case but with the volatile stock market, I would rather have a roof over my head that is on the way to being ours.
About two-thirds of first-home buyers believe rentals are too expensive, and about 40 per cent feel they are caught in a rental trap, according to Commonwealth Bank executive general manager of third party banking, Kathy Cummings.
She says in many cases it is cheaper to buy than rent and first-home buyers appear to be working productively towards raising the required deposit to get into property.
Emma Raphael of Place at Camp Hill in Brisbane says that is what many of her recent clients have been telling her.
She has worked in real estate for almost 12 years and says lately she has seen an increase in potential buyers in the Generation Y group.
“But while I think they are being a little bit cautious, I think confidence is definitely being restored,” she says. She believes many have come out looking following interest rate drops and predictions of more.
She says rising rents is also something many are telling her is encouraging them to investigate the market. “The mind set has shifted – they are prepared to forgo going out to dinner once a week, they reckon it is a pretty good sacrifice to make,” Ms Raphael says. Read more: http://www.news.com.au/money/property/high-rent-pushing-gen-y-to-buy-their-first-home/story-e6frfmd0-1226367512087
If you are experiencing high rents and would rather put that money to getting your own place, now is probably a good time to think seriously about jumping into your new home.
If we see a shift in the market which a few of the property experts are predicting, a jump of 10-20% in house prices may cut out the opportunity for those looking for their first home and take the affordability out of reach. If you have an opinion on the market please leave a comment below.
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