 Buying new homes? Not now...
Plans of buying a home are now daunting for Generation Y as recent survey results show that one in every three Gen Y individual believes that debt servicing after house purchase is scary and which may not be affordable.
The latest survey called Bankwest/Mortgage and Finance Association (MFAA) Home Finance Index shows 10 % increase from November last year in the number of Gen Ys calling off plans for home ownership. Shelving plans to buy house came about while property cost is shooting up across Australia, with median house price in Melbourne now costing $524,500.
Meanwhile, economists are predicting another rate hike in May effected by soaring house cost, upward export revenue and the developing job market.
According to Mortgage and Finance Association CEO Phil Naylor escalating interest rates and mounting house costs indicates that the GenY needs great effort to save a deposit. More than twenty-five percent of the respondents in the survey said that they would consider moving back to their parents to be able to save and buy their own home eventually.
"Given that some lenders are tightening home loan criteria, it’s no surprise that prospective first time buyers will need to make a concerted effort to save for a deposit," Naylor said. "Of those delaying home purchases, fewer are asking families to help fund a home loan deposit. That figure has fallen from 20.4 per cent to 14.7 per cent."
The survey also confirms that Gen Y of Western Australia is the most optimistic in acquiring properties as more than half of the respondents in the region show confidence in the property market. However, total survey results show only 43.7 per cent of the respondent across Australia are optimistic about buying their first home.
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