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A recent survey has revealed that while most Australian millennials intend on buying a home in the next five years, less than a quarter have a precise budget in place to do so.
The HSBC report entitled Beyond the Bricks surveyed 9,000 people in nine countries and found that while Australian millennials’ desire to own a home was on par with that of their global counterparts, barriers in Australia were higher.
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According to the report, three-quarters (75 per cent) of Australian millennials say the challenge of saving for the deposit for a home loan is their biggest barrier, however only 17 per cent intending to do so have a precise budget in place for the endeavour.
Further, 45 per cent who do own their own home say they have overspent on their original budget, which according to HSBC “demonstrates that many are not prepared for the realities of owning real estate in Australia”.
Commenting on the findings, HSBC head of mortgages Alice Del Vecchio highlighted: “The deposit for a home loan is the biggest initial cost of owning a home, but buyers also need to factor in the costs of stamp duty, legal fees, mortgage insurance, building inspection fees and in some cases renovation costs.
“Establishing a budget to buy a home is a vital step in the process, but your budget should factor in for some changes in property prices, allowing for price increases from the time you begin looking. It is not uncommon to look for more than six months to find the right home, and often prices to enter the market have moved.”
Australian millennials said that their second-biggest barrier to owning a home was having an insufficient salary to save, with 61 per cent saying they needed a higher salary before they could buy a home, compared to 54 per cent of millennials in the UK.
“Despite the rising costs, millennials overwhelmingly still want to own a home in Australia. The dream certainly isn’t dead. This research demonstrates that a lack of preparation and understanding of the realities of owning real estate however can stall or even deflate those dreams,” Ms Del Vecchio said.
[Related: FHBs accessing super to fund properties ‘irresponsible’]
