First-home buyers fear missing out more than overpaying for property

First-time buyers are growing wary of paying too much

Exhausted first-home buyers fear they’re overpaying for property in the boom market but are diving into purchases anyway, research shows.

An overwhelming 82 per cent of the property buyers polled in a quarterly survey by ME Bank said they “feel worried about paying too much for property in the current market”.

First-home buyers were the least positive about the market and the most concerned about housing affordability, while investors were the most positive.

Despite this, first-time buyers were the most likely to be planning a purchase, with 52 per cent of respondents saying they wanted to buy in the next 12 months.

This was higher than the 40 per cent of investors with plans to buy and the 21 per cent of existing homeowners.

ME Bank’s head of loans and personal banking Claudio Mazzarella said first-home buyers often had conflicting views on the market.

Many had growing fears they would be paying too much for property but their fear of missing out on a chance to get into the market appeared to be stronger, he said.

“First-home buyer sentiment is getting lower. They’re the most concerned about affordability but they don’t want to miss out, they want to buy soon,” Mr Mazzarella said.

This fear of missing out may have been partly fuelled by the low volume of sales across most capitals.

ME Bank noted a fall in the perceived availability of residential property.

Most first-time buyers surveyed wanted to purchase soon.

Overall, 60 per cent of survey respondents believed there “isn’t enough choice in the current residential property market” − a 17 percentage point increase since January.

Property experts said recent price rises may also be creating a sense of urgency among buyers.

Home prices were growing at the fastest rate in 32 years earlier this year and the average number of days it takes properties to sell remains low in most suburbs.

Existing homeowners have responded to the price rises with much more optimism.

Property owners’ “sense of wealth” and ‘general financial confidence’ increased to the highest levels since the ME Bank’s quarterly Property Sentiment report began in April 2019.

Originally posted on www.realestate.com.au on the 13th May 2021 - https://www.realestate.com.au/news/first-homebuyers-fear-missing-out-more-than-overpaying/