More first home buyers are trying to enter the market than in previous years, many of which are being spurred on by FOMO — or the ‘Fear Of Missing Out’. Driven by the thought that if they don’t buy now they never will, many are trying to make a move to buy their first home. According to ME’s fourth qarterly property sentiment report, just over half of first home buyers (51%) were planning to buy property in the next 12 months, which is a large increase from 38% in the second quarter of 2019.
However, many are feeling the affects of a major issue in the Australian housing market: affordability. 92% of respondents believe that housing affordability is a big issue in Australia. Australia’s housing market has been rated as “severely unaffordable” according to the recent Demographia international housing survey. In fact, the only places more expensive to live than Sydney and Melbourne are Hong Kong (which placed first) and Vancouver (second).
The report also tracked the perception of choice in the property market and found almost half (46%) of total respondents believe there is not enough choice, with this figure jumping to 57% among first home buyers.
“Housing supply has picked up slightly, but with prices rising and demand outweighing supply, there’s no wonder that almost one in two Aussies don’t think there’s enough choice available,” ME general manager Andrew Bartolo said
Despite all of this, first home buyers are turning out in droves to try and get their foot onto the property ladder. Why do so many have this sense of FOMO though?
It’s a complex issue, but it comes down to a couple of factors. Rising property prices carry the risk of squeezing first home buyers out of the market, so it makes financial sense to buy at the perceived bottom of the market — which is where most property markets on the East Coast of Australia are currently sitting according to many market commentators. Additionally, the government’s new First Home Loan Deposit Scheme is giving first home buyers additional incentive to enter the market. If you combine all of this with low interest rates and the rapid rebound in prices that Sydney and Melbourne have experiences in the past 12 months, you can see why so many feel like they have to get into the market today.
In spite of all of this, our recommendation is that don’t want to rush in too quickly. Buying just for the sake of buying is something you will regret, so make sure you take time to consider exactly what you’re looking for in your future home, townhouse or apartment. We recommend doing your research first, ensuring that you know exactly what offers and grants apply to you, where you’d like to ideally live, your budget, etc. Then, start searching for your new home — luckily, you’re already here on PropertyMash, and we’ve got all of the reviews to help you find the place perfect for you.