It’s an iconic image: the young couple, maybe with a baby, standing proudly next to the SOLD sign in their new front garden. First home buyers, living the dream. Now imagine this: same setting, same sign stuck in the lawn, but now the first home buyers are over-40s, and the baby is a teenager.
That’s the way things are going, according to research. Figures for 2007 to 2015 show in the younger age groups, the number of first home buyers has dropped by 20% in the 30-39 category and a hefty 50% of 18-29s. Meanwhile, between 2011 and 2015, the number of first home buyers aged 40-49 has climbed 50%. For the over 50s it’s more than 100%. At this rate, there will be more first home buyers who are over 40 than not.
So what exactly is going on here? Where have all these older buyers come from, and why are they only buying first homes now?
In the past, it’s been assumed it was harder for older people to buy because they would still be paying off their home loans into retirement. But after the GFC, attitudes have changed: older Australians earning more than their younger counterparts, and with more years of credit history behind them, have become desirable buyers.
The increase in age also suggests getting on the housing ladder as soon as possible just isn’t as big a deal as it was. Instead, buyers are taking the time to plan better. That may be because they’re staying in education longer; with more debt to pay off, they’re working hard to clear it and put themselves into a positive financial position. Another factor is that younger people may be taking longer to save for a deposit, placing higher priorities on saving for things like travel.
Maybe WA could buck the trend… Let’s not forget the research that broke last month saying that if you’re saving for a deposit, WA is the fastest place to do it. And sure, it’s also early days since the First Home Buyers’ Grant got its boost back in January, but that should also speed up saving for younger first buyers. So yes, maybe the age of first home buyers is rising nationally, but perhaps we’ll see a middle ground here in Perth, where you can take time to plan properly, but still be young enough to avoid using your Super to pay the mortgage…