First home buyers expect to pay off their home within 15 years, survey finds
MEDIA RELEASE
18 June 2011
While Mums and Dads of the Baby Boomer and Generation X seem content to pay off their loans over 25-30 years, a recent First Home Buyer survey commissioned by RAMS Home Loans has found that 59% of young Australians who recently purchased their first home intend to be mortgage-free in less than 15 years.
The research revealed 9 out of 10 first home owners surveyed were confident of meeting home loan repayments, and in fact, were allocating surprisingly large amounts of their household income to get ahead on mortgage repayments – 62% paying more than the minimum monthly repayment required, and 51% paying more than 40% of their household income towards mortgage repayments.
Conducted by independent market research and consumer insights firm, Nature Pty Ltd in February this year, the research involved interviews with more than 600 Australians between the age of 20 and 40 who were either intending to buy a house in the next 12 months (463 respondents) or had purchased their first home in the previous 12 months (145 respondents).
The study also found that for both home owners and home seekers, acquiring a deposit was the biggest barrier between them and their dream. While more than 80% of respondents said they saved bit by bit to acquire a deposit, many young home seekers had no intention of restricting their lifestyle in the process, with 56% also intending to take an overseas holiday in the next 12 months.
RAMS Head of Brand and Marketing, Lynne Wyatt, said the home seekers of Generation Y were proving themselves to be more aspirational than previous generations and, as many social commentators had noted, Generation Y continues to “want it all”.
“Generation Y behaves the same way when looking for a home as they do with everything else in their lives – they want it all and they want it now,” Ms Wyatt said.
“Generation Y home seekers are confident, in love and looking for adventure in overseas travel as much as they are looking to escape the rental market and purchase their own home.
“Our research also showed that these 20-somethings are relying heavily on family and friends for advice on their first home purchase but interestingly, finding a house near these same family and friends isn’t high on their priority list.
“Instead, young people say they want a good sized house of the right style that they can afford and which is located in a safe area in a quiet neighbourhood. Being in the right location for work or commuting to work is also far more important to young people than being near friends and family or near where they grew up.”
The home seekers indicated they wanted a home mortgage lender who would be a partner to them, ensuring they get the best deal and are on their side, enabling them to make confident choices.
“They also want one direct contact at their mortgage provider and most believe their mortgage provider should also help them with other aspects of their home – all qualities that RAMS Home Loans is equipped to provide,” Ms Wyatt said.
“RAMS is not like the major banks in that it operates through a franchise network, enabling home buyers to have a stronger and deeper relationship with their mortgage provider,” she said.
“RAMS has the strength and values of a major bank but is differentiated from others in the home lending market because of its ability to be flexible and its desire to help out young people looking at getting into the housing market.”
Ms Wyatt said Generation Y was one of RAMS’ target markets and the home loan provider was keen to be an advocate for this confident younger generation, who were also keen to pay off their homes faster than their parents.
“Everything about Gen Y home seekers and first home owners demonstrates the confidence and resilience which characterises this generation,” Ms Wyatt said.
“This confidence will put them in good stead to capitalise on the many factors making purchasing in the current home market a good choice for them. RAMS is keen to attract their business.
“With the Federal Government extending the First Home Buyers Grant and interest rates at a record low, now is a good time to buy a home if you can afford it. Sixty per cent of these young home seekers say they would still be looking for a home even if interest rates had not dropped. It appears many young couples are very much ready to enter the housing market.”
RAMS has a number of ways to help first home buyers achieve their dream of home ownership. Customers can call 13-RAMS (13-7267) to discuss their personal situation with a local home loan manager.
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About the study More than 600 Australians between the age of 20 and 40 who were either intending to buy a house in the next 12 months – first home seekers (463 respondents) or had purchased their first home in the previous 12 months – first home buyers (145 respondents) participated in an online survey. The survey was conducted in February 2009 and a similar survey will be conducted every six months to monitor trends and share perceptions amongst first home buyers. The RAMS First Home Buyers’ Pulse Check provides an overview of the attitudes and behaviours of the typical first home seeker, and the typical first home owner. The study was conducted by independent market research and consumer insights firm, Nature Pty Ltd.
For further information, please contact: Melanie Monico on (02) 8218 6359, 0437 896 093
Fees, conditions, limitations and lending criteria apply. RAMS Financial Group Pty Limited ABN 30 105 207 538 WA Finance broker licence No. 4602. Credit Provider: Westpac Banking Corporation, ABN 33 007 457 141