First Home Buyers have FOMO when it comes to the property market, says ME

By Polly Fleeting · · 3 min read
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Heard of FOMO - the Fear Of Missing Out? 

Well according to ME, that’s what first home buyers are channeling when they think about entering the property market in 2020. 

In its most recent Quarterly Property Sentiment Report, ME found that Aussies looking to buy a home for the first time are actually more interested in securing a property in the next year. 51% of potential first home buyers want to jump into the market in the next 12 months compared to 38% in the second quarter of 2019. 

“Rising property prices carry the risk of squeezing first-home buyers out of the market, however they also signal a healthier market that presents a worthwhile long-term investment,” ME’s General Manager, Andrew Bartolo. 

“In the case of first home buyers, the recent property price recovery has likely nudged them to get in while they can – as though it’s ‘now or never’ – and has created a sense of FOMO.”

Plus with the addition of the Federal Government’s new First Home Loan Deposit Scheme that launched at the beginning of the year, some borrowers will be able to enter the market sooner. 

Under the scheme, the government will guarantee up to 15% of a mortgage for borrowers with a deposit as low as 5%, meaning they’d avoid the extra cost of Lenders Mortgage Insurance.

However the scheme is limited to the first 10,000 approved applicants, so not all first home buyers will receive the guarantee.   

RELATED ARTICLE: Why 2020 is the year of the first home buyer and property investors

The report also found that 55% of respondents believe property prices will escalate over the next year, which jumped up from a mere 38% in the 2019 Q3 Property Sentiment Report conducted by ME. 

“Considering a combination of market factors including the buzz of home value growth, a solid spring selling season, plus rate cuts and signs from the RBA that rates will stay lower for longer, it’s no surprise overall property sentiment has improved,” said Bartolo. 

But there are still some concerns… 

There were a couple negatives that came out of this quarter’s Property Sentiment Report, despite overall sentiment towards the property market improving for the third quarter in a row. 

Naturally, with the potential for property prices to rise, concern about housing affordability is growing amongst house hunters. A whopping 92% of respondents identified housing affordability as a big issue in Australia, up from 89% at the end of last year. 

Similarly, 46% of Aussies agreed that there isn’t enough choice in the market, and over half (57%) of first home buyers felt the same way. 

“Housing supply has picked up slightly, but with prices rising and demand outweighing supply, there’s no wonder that almost 1 in 2 Aussies don’t think there’s enough choice available,” said Bartolo 

“With so many first home buyers planning to buy in 2020, yet most stating choice in the market is a barrier, addressing this issue should be a focus in the year ahead.”

RELATED ARTICLE: 7,000 more slots to open with the First Home Buyers Deposit Scheme

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Last updated 30 October 2024 Important disclosures and comparison rate warning*

Home loan comparisons on Mozo

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  • Fixed Home Loan

    • Owner Occupier
    • Principal and Interest
    Interest rate
    5.54 % p.a.
    Fixed 2 years
    Comparison rate
    5.93 % p.a.
    Initial monthly repayment
    $4,106
    Go to site

    Competitive fixed rate on up to a 30 year loan term. No application fees to pay. Additional repayments up to $20,000 per year without penalty. Free online redraw. Optional 100% offset feature ($10/month) 10% minimum deposit. Fees & charges apply, Australian Credit Licence 237879 is held by Bendigo and Adelaide Bank Limited, the credit provider.

  • Fixed Express Home Loan

    • Owner Occupier
    • Principal & Interest
    Interest rate
    5.54 % p.a.
    Fixed 2 years
    Comparison rate
    6.11 % p.a.
    Initial monthly repayment
    $4,106
    Go to site

    Lock in a low 2 year fixed rate with the Mozo award winning Home Lender of the Year. Available for live-in borrowers with just a 10% deposit required. Free extra repayments (up to 20% in fixed period), free redraw and partial offset available. $10 monthly service fee. Aussie support centre. Fast approvals. Up to 6 free offset accounts (T&Cs apply).

  • Fixed Home Loan

    • Owner Occupier
    • Principal and Interest
    Interest rate
    5.54 % p.a.
    Fixed 2 years
    Comparison rate
    5.93 % p.a.
    Initial monthly repayment
    $4,106
    Go to site

    Competitive fixed rate on up to a 30 year loan term. No application fees to pay. Additional repayments up to $20,000 per year without penalty. Free online redraw. Optional 100% offset feature ($10/month) 10% minimum deposit. Fees & charges apply, Australian Credit Licence 237879 is held by Bendigo and Adelaide Bank Limited, the credit provider.

  • Fixed Express Home Loan

    • Owner Occupier
    • Principal & Interest
    Interest rate
    5.54 % p.a.
    Fixed 2 years
    Comparison rate
    6.11 % p.a.
    Initial monthly repayment
    $4,106
    Go to site

    Lock in a low 2 year fixed rate with the Mozo award winning Home Lender of the Year. Available for live-in borrowers with just a 10% deposit required. Free extra repayments (up to 20% in fixed period), free redraw and partial offset available. $10 monthly service fee. Aussie support centre. Fast approvals. Up to 6 free offset accounts (T&Cs apply).

  • Fixed Rate Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <90%
    Interest rate
    5.89 % p.a.
    Fixed 5 years
    Comparison rate
    6.62 % p.a.
    Initial monthly repayment
    $4,266

  • Variable Home Loan

    • Owner Occupier
    • Principal and Interest
    Interest rate
    5.98 % p.a.
    Variable
    Comparison rate
    6.02 % p.a.
    Initial monthly repayment
    $4,308
    Go to site

    Competitive variable rate on up to a 30 year loan term. No application fees to pay. Unlimited additional repayments. Free online redraw. Optional 100% offset feature ($10/month) 10% minimum deposit. Fees & charges apply, Australian Credit Licence 237879 is held by Bendigo and Adelaide Bank Limited, the credit provider.

  • Express Home Loan

    • Owner Occupier
    • Principal & Interest
    • LVR <90%
    Interest rate
    6.09 % p.a.
    Variable
    Comparison rate
    6.22 % p.a.
    Initial monthly repayment
    $4,359
    Go to site

    Get online approval from the award-winning Bendigo Bank Express Home Loan. Multiple offset accounts and redraw available. 100% offset on variable rate loans and partial offset on fixed rate. Flexible repayment options. New home loans only.

  • Discounted Home Value Loan

    • Owner Occupier
    • Principal & Interest
    • LVR 80-90%
    Interest rate
    6.39 % p.a.
    Variable
    Comparison rate
    6.39 % p.a.
    Initial monthly repayment
    $4,499

    Enjoy competitive rates for owner occupiers. Enjoy unlimited free extra repayments. Flexibility to redraw additional payments for free. No ongoing monthly service fee. Settlement fee waived on new borrowings from $50,000 (T&Cs apply).

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* WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for $150,000 over 25 years.

** Initial monthly repayment figures are estimates only, based on the advertised rate. You can change the loan amount and term in the input boxes at the top of this table. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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