Study shows FHB investors least well off
2015-06-18A new study by comparison website Finder.com.au has found that first homebuyer investors are the least well off in the Australian property market despite being in a better financial position.
These FHB investors are more likely to have a bigger household income than owner-occupier FHB – almost double the proportion have a household income of more than $200,000 (17 per cent) compared to FHB owner-occupiers (9 per cent). More than half of first-time buyer investors (59 per cent) have a household income of $100,000 or more, compared to 46 per cent of FHB owner-occupiers.
The study found that purchase budgets are also bigger for FHB investors, as 52 per cent are spending more than $500,000 compared to just 35 per cent of FHB owner-occupiers. More FHB investors have a budget higher than $1 million compared to FHB owner-occupiers, too.
First homebuyer investors are less likely to buy their first property in the same city in which they live (79 per cent) compared with FHB owner-occupiers (91 per cent). Forty-eight per cent of FHB investors are likely to buy apartments, townhouses and villas compared to just 36 per cent of owner-occupiers.
Michelle Hutchison, money expert at finder.com.au, said despite deeper pockets than owner-occupied FHB, FHB investors are finding it the toughest in the property market.
“First homebuyers are among the lowest levels we’ve ever seen, currently at just over 15 per cent of all home loans financed, and it has been steadily declining for over a year.
“Government grants for FHBs have declined while property prices have grown considerably over the past few years. And now with some lenders pulling back on their attractive rates to investors, first-time buyer investors are the worst off.
“However, this is good news for FHB owner-occupiers, who are the majority of FHBs, as it could help alleviate the property market heat, which is being pushed by investors and refinancers.
“Whether you’re buying your first home to live in or as an investment, prospective borrowers need to be careful with over-stretching themselves as it’s not worth the financial risk if you can’t afford to jump into the market. Work out how much you can afford to repay with a buffer for rising interest rates and stick to a budget or face financial stress down the track.”
Capital city results
Sydney has the highest number of FHB investors, followed by Melbourne and Perth, while Adelaide has the least
Sydney FHB investors are more likely to have a budget over $500,000 than FHB investors in other capital cities, while Adelaide were the least likely
Perth and Brisbane FHBs are the least likely to have a budget over $1 million, while Sydney and Melbourne were the only cities to have FHB investors with property budgets of over $1 million
Sydney FHB investors were more likely to have a household income of more than $100,000, followed by Melbourne, than Perth. The least likely is Adelaide.
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