Many buyers are forced to spend more than they initially hoped, but this will later affect buyers’ ability to repay their loans. Image: NCA NewsWire / Flavio Brancaleone
The first home buyers across Australia are breaking the bank and spending way more money than they can afford to buy a new home for themselves.
Research from Finder’s First Home Buyers Report indicates that the housing affordability crisis has pushed more than a third of first home buyers beyond their budget.
Up to eight percent of recent first-time homebuyers paid more than $100,000 over their budget, and another eight percent paid between $50,000 and $100,000 over budget.
LAKE:
Old school transformed into a lavish waterfront retreat
Historic Doctor’s Home ‘The Mansion’ Sells for $2.15 Million
Energy crisis is changing homes in Australia
The first home buyers across Australia are breaking the bank and spending way more money than they can afford to buy a new home for themselves.
This pressure on buyers to enter the market has led to one in eight home buyers looking for a home in another state, with about 25 percent looking for a home in a different region of their own state.
Sarah Megginson, senior editor of money at Finder, says high real estate prices are destroying buyers’ budgets.
“We are in a market where prices have risen 20-30 percent in the last year, and wages just can’t keep up with that level of growth,” said Ms. Megginson.
One in eight home buyers wants to buy a home in another state, as many are priced outside of their own state. Photo: Nick Clayton
“Many are forced to spend more than they initially hoped, but this will later affect buyers’ ability to repay their loans.”
Megginson believed buyers would have better luck finding a home within their budget if they expanded their location filters or searched for an apartment or unit rather than a house.
The survey found that 41 percent of NSW and 40 percent QLD buyers went over budget, compared to 31 percent of Victorian buyers.
House prices have increased by an average of 19 percent in the eight capital cities over the past year, with the number of homes rising by 12 percent. Photo Katrina Tepper. NSW / Industry / Housing / Real Estate
Richard Whitten, Finder’s home loan expert, says home prices in the eight capitals have risen an average of 19 percent over the past year, with units rising 12 percent.
“Buyers who are open to relocating can take advantage of lower prices in regional areas or smaller towns,” said Mr Whitten.
“I moved from Sydney to Melbourne, partly because of the property prices. If you take a closer look at your real estate budget in a different market, you suddenly have many more options.”
Over the course of 2020-21, regional prices rose as city dwellers adopted the sea and tree changes.
Urban people have increasingly moved to regional areas because they are more affordable than urban suburbs. Image: NCA NewsWire / David Swift
Under-quoting was also cited as a major problem affecting first-time homebuyers, with many being given a figure 20-30 percent below the quoted price.
“Many are forced to spend more than they had hoped, but this will affect buyers’ ability to repay their loans later on,” Megginson said.
“Under-quoting is illegal, but it does happen, especially in the case of auctions, where prices that are too low can attract more buyers and lead to a bidding war.”
LAKE:
Enchanting $12 Million Home in Love Island Comes to the Market
Sydney castle for sale with moat, other crazy features
Shocking move when daughter buys absent parents a new house
