First home buyers remain determined to jump onto the property ladder despite housing affordability being at a record low, according to research just released by Wizard Home Loans.
Wizard's Tomorrow's First Home Buyers series has revealed that the number of Australians intending to purchase their first home in the next 12 months jumped six per cent from 494,000 in the December `06 quarter to 523,000 in the March `07 quarter.
Wizard chairman Mark Bouris said the research showed the growth was largely driven by first home buyers with higher household incomes keen to capitalise on their financial gain through property investment.
"We are seeing the emergence of a new breed of higher-income first home buyer with their sights set firmly on the property market as a way to build their wealth," said Bouris.
"The growth in average household incomes has been led by first home buyers with household incomes of $140,000 or more. Intentions among this group grew from seven per cent in the March 06 quarter to 22 per cent in the March 07 quarter.
"As well, the average household income of tomorrow's first home buyer has risen strongly in recent quarters. These gains were maintained in the March quarter, with an average income at $93,000.
"Given the current market conditions, it's little surprise that a healthy income is the key factor determining home ownership.
"In contrast, the percentage of low income households with ambitions of buying a first home has dropped sharply, down from 40 per cent 12 months ago to 19 per cent in the latest survey."
Bouris said that despite contending with an increasing cost of living and rising rents, more than a third of all intending first home buyers said they are confidently building their savings.
"The data shows that despite rising interest rates and upward pressure on rents, first home buyers are generally okay about the current state of their personal finances," he said.
On a national scale, the number of people intending to buy their first home increased in all states except NSW/ACT and WA.
Although NSW/ACT experienced a decline in numbers, its growth remains at more than 60 per cent higher than the previous year. And first home buyers in Western Australia, spooked by rapidly increasing property prices, appeared to have momentarily set aside their ambitions for home ownership with no significant change in this quarter's results:
- Queensland increased 44 per cent from 62,000 to 89,000
- Victoria increased four per cent from 110,00 to 114,000
- New South Wales/ACT decreased eight per cent from 235,000 to 217,000
- Western Australia remained the same at 36,000
- South Australia/Northern Territory increased 23 per cent from 48,000 to 59,000
- Tasmania increased by 133 per cent from 3,000 to 7,000.
"Despite the curve balls being thrown in the current property market, first home buyers backed by buoyant household incomes and financial know-how, are confident about their chances in achieving home ownership," Bouris said.
