First-time home buyers are also more interested in buying properties. However, several of them, being their first time to invest in a residential property and still young and not yet developed in their professions, can afford just a small house. see this for more details.
Surveys also found that most of these first home buyers are already dependent on their parents for funds that will enable them purchase their first house and most notably compensate for their deposit.
A study conducted by realestateview.com.au called Housing Preference Report showed that 19.4 per cent of consumers depend on their parents by saving capital, staying with them or having them as a parental guarantor when it comes to paying the deposit on a house. Victoria buyers (23.7 percent) were found to be more reliant on their mum and dad compared with their NSW peers (15.8 percent).
As for first-time home buyers, almost half or 42.6 per cent of buyers rely heavily on their parents to join the housing market. The study found that 14 percent of first-time home buyers borrow funds from their mum and dad to fund their mortgage, 13.2 percent stay and spend with their parents and 15.4 percent use a parental guarantor to help obtain a loan.
Nonetheless, not all first-time home buyers depend too heavily on their parents while investing in the house. Less than half or 59 percent still save with a daily savings account and 14 percent invest with a first saver account in their house.
Typically a deposit of 20 per cent is expected while purchasing a house. Nevertheless, if you have no registered investment, you do have other choices. One is to use your parents ‘ pledge as collateral to support you purchase a house. That loan requires a mortgage on the properties of your parents or a cash deposit to fund it.
However, the Housing Sentiment Survey reported that more Victorians (43.2 percent) invest capital into a daily savings plan than NSW savers (31.6 percent). The same pattern has been noticed in selling their house and using the sale income to purchase a new house with Victorians with 35 percent and NSW citizens with 31.6 percent.
Another alternative is the Deposit Protect Bond that helps you to buy a home right before making a cash deposit. Nevertheless, this is helpful because you are qualifying for the First Home Buyers Loan, even if the cash is correlated with certain savings.