For the first time in four years, next time home buyers – those who already own a home and are re-entering the market - are saving a higher proportion of their income than first time buyers, according to the CBA Home Finance Index survey.
The survey found next time buyers are saving on average 16.6% of their take home income, up from 12.3% a year ago, indicating a significant shift in the market.
When coupled with low interest rates and steadily growing incomes, next time buyers are now able to borrow the highest average value home loans in Australian history.
While next time home buyers are well positioned to take advantage of the market, data from 1,291 survey respondents found three in five Australians (59.9%) predict residential property prices will rise in the coming quarter. This is up from 49.8% since the last time the research was conducted in March 2013.
Commonwealth Bank General Manager, Home Loans, Clive van Horen, said: “The strong increase in next time buyers savings since March 2013 is evidence this group will continue to play a major role in the residential property market.”
“This discerning customer segment will increasingly market leading guidance, advice and products from home loan providers like CommBank as they seek to invest in their next property.”
Of those next time buyers, 58% intend to purchase an investment property, compared to 42% who intend to change or upgrade their current home.
In stark contrast, data from the survey shows first time buyers savings are at record low levels. Only two in five first home buyers think it’s a good time to buy a new home.
For those seeking housing finance, just over 50% have a preference for banks as mortgage providers, however preference for mortgage brokers has increased compared from 2013, well ahead of mortgage brokers at 35.9% and credit unions/building societies at 10.2%.
This is the 19th Home Finance Index report, conducted by CoreData measures consumer sentiment towards Australia’s property market.