Some three-quarters of first home buyers in Australia are failing to raise the 20% deposit required for a home loan, with many taking out Lenders Mortgage Insurance (LMI) or tapping the bank of mum and dad to make up the shortfall.
The results were revealed in the July Helia Insurance study of more than 1,000 first home buyers across the nation, in which almost 90% agreed that it was harder than ever to buy their first property.
Some 55% of these buyers used LMI to access a deposit, while 45% relied on the bank of mum and dad—up from 34% last year.
Others (48%) drew upon government assistance and schemes, while 39% were working overtime to save more money.
The study also revealed the ways in which first home buyers were trying to save, including 68% cutting back on dining-out and hobbies, 60% holidaying less, and, most concerning, 45% of first home buyers limiting their electricity use (heating and cooling) to save cash. Almost one-third were cutting back on medical treatment or personal grooming.
The high cost-of-living and expensive housing market is seriously affecting first home buyers’ ability to save: 18% were currently not saving any money and 35% of those surveyed were considering giving up on buying a home.
Barbara Hutson