Inflamed Market Poses Threat to First-Time Home Buyers
Pushing individuals to enter the “overheated” housing market is not recommended, according to an expert, as new data shows first-time buyers are eager to purchase property quickly.
A recent report confirms that Australians are keen on climbing the property ownership ladder amid discussions within the federal government on the best ways to assist buyers.
On Sep. 20, a survey conducted by insurance company Helia revealed that 71 percent of Australians believe that “now is a good time” to buy a property, despite cost-of-living challenges and ongoing inflation at 3.8 percent.
Out of the 3002 respondents, 1965 were first-time buyers, with the majority (87 percent) expressing a sense of urgency to purchase their first property as prices continue to rise.
This survey comes at a time of conflict between the federal government, coalition, and Greens regarding strategies to facilitate more Australians in buying homes.
On Sep. 18, the Greens successfully postponed the government’s Help to Buy bill by two months after negotiations between Labor and the minor party stalled.
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Prime Minister Anthony Albanese announced that the government would reintroduce the bill in the House of Representatives during the next session in October to expedite a Senate vote.
The Liberals also reinforced their superannuation-for-housing policy, which permits first-time home buyers to utilize their super funds to buy a home, arguing that it could save the budget at least $1 billion (US$0.68 billion).
Professor Emma Baker, the director of the Australian Centre for Housing Research, cautioned against focusing solely on home ownership.
She stated, “Encouraging individuals to enter an overheated market is not advisable. It’s unjust to them, and stimulating demand in a tight market only worsens unaffordability.”
Baker highlighted the increased challenges young individuals face in becoming homeowners compared to previous generations. She pointed out that house prices have steadily soared over the past 50 years, rising from three times to approximately 10 times the average income.
The survey indicated that the most significant barriers to ownership cited by 54 percent of respondents were cost-of-living increases in housing. Other barriers included concerns about housing affordability (43 percent) and finding a suitable property within budget in a desirable location (42 percent).
Baker suggested that the focus should shift towards making rental markets more appealing rather than fixating on increasing home ownership numbers.
