First time buyers around the globe are making their first purchases later, as they struggle with the rising cost of housing and living, new research has revealed.
According to Genworth’s International Mortgage Trends Report, which surveys sentiment of existing and aspiring home buyers in Australia, Canada, India, Ireland, Italy, Mexico, the UK and the US, affordability is stopping first home buyers from getting onto the property ladder.
“In almost all of the countries surveyed, housing affordability is keeping FHBs out of the market, though the factors behind this lack of affordability differ, and range from rising costs of living and fears of interest rate rises, to lack of housing availability and rising house prices,” Genworth Australia chief executive Ellie Comerford said.
In the US, Canada and Australia, debt is weighing down many who are trying to get a foot on the property ladder, with one in five potential first home buyer respondents spending more than half their income on debt repayments.
In stark contrast, less than one in ten Mexican and Indian potential buyers are suffering the same debt burdens.
These high debt levels of potential buyers in some countries are exacerbating the affordability challenge, causing the average age of new home buyers to steadily increase in all countries except India.
The average age of a first home buyer across all countries surveyed has increased from approximately 27 in the 1970s to approximately 30 in the 2000s.
In Australia the average first home buyer age now rests at 28.6.
“Australian first home buyers are facing a worsening situation, with the average age of potential home buyers accessing the local market increasing at a faster rate than average,” Ms Comerford said.
However, it’s not all bad news. Ms Comerford told Smart Property Investment that many of the surveyed respondents felt now was a good time to buy.
Moreover, many Australians still saw good opportunity to get onto the property ladder.
“First home buyers may be struggling, but that doesn’t mean everyone is,” she said.
“Investors do still think it is a good time to buy. However, that positivity will vary depending on environment and location. There is no doubt that many Queenslanders and Western Australians think now is a very good time to buy. They know that both these areas will continue to go up in value, making them an ideal investment choice.”