March 8, 2010If interest rates rise by two percentage points, more than one in three Queenslanders looking to buy their first home in the next two years will give up on the purchase, according to results from the 2010
Mortgage Choice First Homebuyers Survey.
This may be because the Sunshine State had a high proportion of potential first homebuyers intending to buy on their own.
The independent online survey found this was the plan for 33 percent of respondents, compared to 23 percent in the 2009 survey.
Nine percent intended to borrow the full purchase price despite 100 percent home loans being non-existent in today’s climate.
On the flipside, one in five will have a deposit of 20 percent or more to contribute towards their first home purchase.
A significant percentage (73 percent) were going to make lifestyle sacrifices in order to purchase, however, this was a decrease on the 76 percent in the 2009 survey and 78 percent nationally for this year.
Queensland first homebuyers’ main motivation to purchase was that they wanted to set themselves up financially for the future (74 percent of respondents).
Meanwhile, 58 percent said they were keen get their foot in the property market door and 31 percent saw more benefit in investments such as property than in the share market.
Local franchisee owner for Mortgage Choice, Caroline Jean-Baptiste, says it is “terrific” to see the survey results showing up-and-coming first homebuyers acknowledge the long-term benefits property investment has to offer.
“Yet we do have mixed results. Although a large portion of Queensland’s first homebuyers-to-be are prepared for interest rate rises and appear to be quite knowledgeable about the market, a significant proportion – 38 percent - say they’ll back out of buying if rates increase by up to two percentage points,” she says.
“Savvy mortgage holders give themselves at least that as a repayment buffer each month so these buyers should think very carefully about entering the market.”
Other key Queensland findings reveal:
- 66 percent will purchase their first property with a partner, family member or friend in a co-ownership agreement while 33 percent will commit alone
- 45 percent will purchase an established home (compared to 70 percent in 2009)
- 99 percent have ‘some idea’ or more about the property purchase process, while only 1 percent have ‘no idea’ - the least of any state
- The most popular predicted mortgage size range of these first time buyers is between $300,001 and $400,000, as indicated by 44 percent of respondents
