What Do We Know About Sydney’s First Home Buyers?

We hear them talked about all the time – in the news, by the government, or the Reserve Bank.

But just who are Sydney’s first home buyers, and what do we really know about them?

You can’t have failed to miss the deluge of news stories about first home buyers this year, or in previous years either. We hear a lot about first home buyers, but how much do we really know about them?

Who are they?

For a start, they’re older than you might think.

Research released in late 2020 shows that the average age of Australian first home buyers is now 36. Compared to other countries around the world, that’s at the older end of the scale. This is because property in Australia is more expensive than in many other parts of the world. This certainly supports what we’re seeing, and we’ve observed that the new breed of older first home buyers has been active here in the eastern suburbs for a while now. Incidentally, we’ve found that they often have a bigger budget to spend than a first home buyer in their 20s.

There’s also a lot of them about.

Government incentives, bargain-basement interest rates and FOMO (the fear of missing out) have propelled large numbers of first home buyers into the market this year. ABS figures from May show that 32.7% of all new owner-occupier home loans went to first home buyers. First home buyer lending is at record high levels here in NSW.

How are they getting on the property ladder?

This year they’re taking advantage of the help being offered to them by the Federal and State Governments. Here in NSW that includes:

• First Home Owner’s Grant (New Homes) – a $10,000 grant for first home buyers purchasing or building a brand new home worth no more than $750,000.
• First Home Buyers Assistance Scheme – a full or partial exemption on transfer duty for first home buyers purchasing a home for less than $1 million.
• First Home Super Saver Scheme – helps first home buyers supercharge their savings by allowing them to build their deposit inside their superannuation, therefore giving them a tax break.
• First Home Loan Deposit Scheme – allows first home buyers to buy a home with a deposit of as little as 5% (rather than the usual 20%) without having to spring for lenders mortgage insurance. Under the scheme, the government’s National Housing Finance and Investment Corporation (NHFIC) acts as guarantor for up to 15% of the value of the property.
• Family Home Guarantee – a new Commonwealth Government scheme that works in a similar way to the First Home Loan Deposit Scheme. The NHFIC guarantees home loans for eligible single parents who have saved a 2% deposit. They may or may not be first home buyers.

Many first home buyers looking to get their foot on the property ladder are also being given a financial leg-up by their parents. The trend of parents lending or gifting money to their children to help them purchase property is so common that data reveals the Bank of Mum and Dad is now Australia’s ninth-largest home loan lender.

Are they buying in the eastern suburbs?

Last year, spurred by the widespread uptake of remote working and the government’s Homebuilder scheme, there was a trend among first home buyers for properties with a lot of space. This saw demand jump in regional areas and Sydney’s outer suburbs.

But there is still plenty of first home buyer activity here in Sydney’s east. According to data released by the NAB in December, Darlinghurst, Surry Hills and Maroubra were three of the top five Sydney suburbs for first home buyers.

Figures from realestate.com.au have Randwick in the top ten suburbs for first home buyers looking for units in 2020. And numbers from Revenue NSW show that in the 2019/20 financial year first home buyers were making the most of stamp duty exemption and concession schemes in suburbs like Darling Point, Point Piper, Edgecliff, Double Bay, Bellevue Hill, Rose Bay, Bronte, Vaucluse, Coogee, Bondi, Tamarama, Surry Hills, and Woollahra.

If you’re looking for your first home in Sydney’s eastern suburbs, get in touch today.