More first-home buyers are choosing apartments with the intention of trading up, according to a new report.

Based on a survey undertaken in June and July 2019, of 2,001 Prospective First Home Buyers and 1,008 Recent First Home Buyers across Australia, the Genworth First Home Buyer Sentiment Report reveals that almost three in four Prospective First Home Buyers believe now is a good time to buy their first home, with one in two citing recent “falling property prices” as the primary reason. 

The data also indicated one in three (32.3 per cent) prospective First Home Buyers plan to sell within five years - more than double the proportion of Recent First Home Buyers (15.8 per cent), reflecting what the report describes as a more "pragmatic approach to entering the market sooner by purchasing an 'entry-level' property and trading up in a few years". 

Genworth First Home Buyer Sentiment Report - At a glance

• Almost three in four Prospective First Home Buyers believe now is a good time to buy their first home, with one in two citing recent “falling property prices” as the primary reason.
• One in three (32.3 per cent) prospective First Home Buyers plan to sell within five years - more than double the proportion of Recent First Home Buyers (15.8 per cent).
• One in six (15.5 per cent) plan to buy an investment property as their first home, compared to one in ten (10.3 per cent) Recent First Home Buyers. 

This has led to the free-standing home is starting to be superseded by small apartments as the most popular property amongst Prospective First Home Buyers.

According to the report, this is especially prevalent Sydney and Melbourne where more than one in three (36.3 per cent) and one in four (24.9 per cent) Prospective First Home Buyers respectively are planning to buy a small apartment as their first property.

Investment properties are also increasingly popular amongst Prospective First Home Buyers keen to enter the market, with one in six (15.5 per cent) planning to buy an investment property as their first home, compared to one in ten (10.3 per cent) Recent First Home Buyers.

This trend is most noticeable in Sydney where affordability poses the greatest barrier to entry into the market, with one in four (24.8 per cent) Sydney based Prospective First Home Buyers looking to buy an investment property and using the rental income to service the loan. 

Genworth Mortgage Insurance Australia Limited (Genworth) CEO and Managing Director Georgette Nicholas said dynamic market conditions were resulting in changing first home buyer behaviour and needs.

“As first home buyer needs continue to evolve it is important that a range of stakeholders (both public and private) work together to develop solutions that complement each other and continue to support the Australian dream of home ownership," she said.

Click here to download a copy of the report. 

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