One in five first home buyers open to buying in a different state
Soaring home prices have put first home buyers on the back foot, with affordability now a key issue in the Australian property market.
The continued house price growth has poured cold water on first home buyers, who until the end of March had the $15,000 HomeBuilder Grant as a financial platform when buying new property.
The median sale price for a house has reached over $1.1 million in Sydney in April, followed by $806,000 in Melbourne, according to CoreLogic. Apartments approve the more attractive proposition for first home buyers, with Sydney's median at $755,360 and Melbourne's at $593,121.
The growing property prices has led to first home buyers considering buying interstate, Finder’s First Home Buyers Report 2021 has found.
Finder surveyed 1,028 first home buyers, and 20 per cent said they are searching for their first property in a different state to where they currently live. That equates to around 2,362 first home buyers a month willing to buy in another state to get on the property ladder.
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The report found that first home buyers from New South Wales (24%) are more likely to consider buying a property in another state than those living in Queensland (19%) and Victoria (17%).
Sarah Megginson, home loans expert at Finder, said that many prospective buyers are being lured by cheaper property across state borders.
“Some first home buyers are looking at real estate in other parts of the country where prices are more affordable, with many feeling the pressure to buy while interest rates are low.
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“The impact of COVID-19 has also caused a spike in demand for regional properties, as residents in Sydney and Melbourne consider swapping city living for more of a laidback lifestyle.
“With property prices soaring in recent months, it can put additional pressure on first home buyers, who may find themselves priced out of their own city.
“This is where an interstate move can work to your advantage as a prospective buyer.
“Even if you’re not keen to move, a rentvesting strategy – where you buy a more affordable home in a different location and continue renting where you want to live – offers a way to get your foot on the property ladder,” Megginson said.
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Finder’s First Home Buyers Report 2021 also found that men (24%) are more likely than women (17%) to be considering an interstate move to get into the property market.