A recent survey has found that first time home buyers are increasingly considering purchasing a property investment. The survey, published earlier this year, was conducted by Digital Finance Analytics (“DFA”), and looked at the current housing arrangements and plans of 26,000 people. Of those surveyed, around 15% stated that they were first home buyers.
The main message from the survey results was that people who were new to the market were more and more looking at investment properties in popular inner city suburbs, rather then becoming owner-occupiers themselves. Using the data in January this year from the Australian Bureau Of Statistics as a baseline, the survey found that 3,661 first time purchasers were planning to get a mortgage to buy a property investment, making up around 35% of all property purchases. Almost 6,000 mortgages went to owner occupiers (57% of total purchases).
Other findings from the DFA survey included details about the type of funding that first time purchasers were choosing, including:
- 36% of mortgages taken out were interest only
- 850 of those surveyed (8%) did not require a mortgage at all, relying instead on other sources of funding such as family members or were funded from overseas. Some purchasers were also teaming up with friends to spread the cost and the risk of investment property.
- Of those 850 people, 550 were expected to be in NSW, and more than 200 in Victoria, with the other states making up the rest of the purchases.
According to analysis from the DFA survey, one of the main reasons that first time buyers were turning to property investment was that they felt that they were less able to afford a property they wanted to live in. By purchasing an investment property, they felt that they could get a step up the property ladder, and would be able to purchase their own home with the equity in their investment several years down the track. For this reason, apartments and units were seen as a good investment as they were less expensive than houses, and could offer benefits such as negative gearing and cheaper ongoing maintenance costs than houses.
If you’re one of the many people considering property investment for the first time, it looks as though you are not alone. The important thing to keep in mind in a thriving property market is that you can give yourself a head start by doing the right research and getting the right advice. Being one of the leading property investment companies in Australia, Ironfish helps first time buyers navigate their way through all aspects of finding and purchasing off the plan and brand new properties. Taking advantage of their expert knowledge and experience in the market over many years, the Ironfish professionals can assist first time buyers with creating successful long-term strategic investment plans for building future wealth and prosperity.