Lifestyle changes and high property prices have pushed up the average age of today’s first homebuyers.
When we think of first home buyers, images of ‘20-somethings’ typically spring to mind. In fact, today’s first homebuyers are more likely to be aged in their 30s, up from 25 in the 1970s.
Part of this trend reflects higher property prices, but there are other issues at work.
These days Australians are more likely to leave school at age 18, rather than 16, often completing tertiary studies before entering the workforce. This puts a brake on the age at which we can start saving for a home.
In addition, many of us want to tick off a ‘bucket list’ of experiences before settling down to home ownership. Consequently there’s less of an expectation that young people will start looking for a home as soon as they enter the labour force.
Age brings advantages
Buying a first home in our thirties isn’t necessarily a bad thing. We’re more likely to be earning a decent salary and be in a better financial position to manage a mortgage than we were in our twenties.
Older buyers are also better placed to have a clear idea of their longer term lifestyle, and can focus on a property that will meet their needs for many years to come.
It’s worth trimming the term
Nonetheless buying a first home in your 30s can mean paying off a mortgage in your 50s or 60s – a time when the issue of retirement funding looms large.
That makes it worthwhile for older first timers to consider ways of paying off their mortgage sooner. One option is to select a loan term of 20 years rather than the traditional 25 or even 30 years.
Alternatively, aim to make extra loan repayments. Even small additional payments can make a big difference to the time taken to pay off a home loan, with valuable savings in interest along the way.
No matter what your age as a first homebuyer, it’s essential to choose a property that ticks all the boxes in terms of location and value. If you get these right, home ownership should offer the rewards of long term capital growth. And that’s appealing at any age.