Fifty-two per cent of first home buyers have delayed their plans to purchase property due to the COVID-19 pandemic, according to new findings from Gateway Bank. Meanwhile, 16% have put their plans on hold indefinitely.
“As more people are being forced to spend their deposit savings on basic living expenses, the prospect of buying a property is now even more elusive,” said Gateway Bank chief executive officer, Lexi Airey.
In a survey of 700 Australians hoping to buy their first home, Gateway Bank found that half have been forced to dip into their deposit savings. Of this group, 45% did so to cover day-to-day expenses, while 17% used their savings to help a family member experiencing financial stress.
Perhaps most shocking, 16% of potential first home buyers admitted to draining most of their deposit in the months since the pandemic struck.
For many, recovering lost savings won't come easy, especially at a time when job insecurity is on the rise and ties to employment are only being preserved through government largesse.
In fact, according to the research, 56% of first home buyers believe it will take them an additional one to three years to save up a deposit, while 25% expect to be saving for at least another three years.
Is there any support available to first home buyers?
While the dream of home ownership has been pushed back for many, hopeful buyers shouldn’t despair. Airey reminds Australians there are several government programs designed to help first home buyers get a foot on the property ladder.
These include the First Home Owners Grant (FHOG), which subsidises the purchase or construction of new homes, along with the First Home Loan Deposit Scheme (FHLDS), which allows borrowers to buy a home with a deposit of as little as 5%.
Unfortunately, many Australians are still in the dark about these programs. The survey conducted by Gateway Bank found that only 56% of respondents were aware of the FHOG, while only 32% knew about the FHLDS.
Other measures like stamp duty concessions and the First Home Super Saver Scheme have also escaped the attention of all but 24% of respondents. Meanwhile, 22% of those surveyed weren’t aware of any government schemes whatsoever.
“Awareness of these measures is generally quite low, and those looking to enter the property market for the first time could be missing out on an opportunity to put their pre-COVID home ownership plans back on track,” Airey said.
For a quick overview of the support available to first home buyers, along with more relevant tips, browse our first mortgage guide. And if you want an idea of where rates currently sit, head over to our home loans comparison page, or check out the selection below.
Home loan comparisons on Mozo - last updated January 16, 2021
^See information about the Mozo Experts Choice Home Loans Awards
Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.
While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.