University graduates would like to move into their own homes, yet fewer than 20 per cent expect to do so in the next year due to high property costs and the lack of available low-cost financing, according to new research.
The Genworth Financial Mortgage Trends Report found that, of the total population of graduates who graduated over 2003-2006, only 14 per cent live in their own homes, while 33 per cent live with their parents, and 53 per cent live with other family or friends or in rented accommodation.
A common perception of recent university graduates is that they are not financially astute and would rather travel or indulge in "lifestyle" purchases than seek financial stability and wealth accumulation. However, the report found that with rising debt levels associated with higher education, graduates are forced to adopt a more responsible attitude to their finances.
Far from ignoring the debt that they have accumulated during their years of study, recent graduates are meeting it head on and accepting responsibility for paying it off.
In fact, paying off debt is their top priority. Thirty-three per cent of respondents stated that paying off their existing debt was their number one priority, with a further 19 per cent stating it was their number two priority. Second in importance was purchasing a home, with 27 per cent choosing this as their number one priority, and 22 per cent choosing it as their number two priority.
Respondents were asked when they expected to be able to purchase property in the future. Eighteen per cent expected to do so within the next 12 months, 33 per cent expected to be able to do so in the next three years, and 27 per cent expected to be able to do so in the next five years.
These graduates were then asked to set aside financial considerations and state when they would ideally like to purchase property. This changed matters considerably.
Those who would like to purchase property over the next 12 months increased markedly to 50 per cent, with those that would ideally like to purchase in the next three years accounting for a further 26 per cent of respondents.
This means that in total, 76 per cent of recent graduates would ideally like to purchase property at some point in the next three years. Just 0.3 per cent of respondents stated that they would never want to purchase property.
Graduates are realistic about the financial requirements of purchasing property, and are keen to save any deposit themselves rather than relying on family or loans from other sources.
When asked what was preventing them from entering the market, responses were almost entirely focused on finances. Almost half (48 per cent) of respondents stated that a lack of a deposit was the issue, while 39 per cent believe property prices are too expensive. Thirteen percent cited `other' reasons, of which 2.5 per cent stated that they wanted to travel first and 1.3 per cent had no desire to purchase property at this point in time.
