Key trends
Queensland First Home Buyer grants have assisted buyers to reach 45% of new purchases since introduced
2 in 10 of First Home Buyers choosing to 'rentvest'
Bank of Mum and Dad jumps 50% on 2022 reaching 1 in every 20 First Home Buyers
A further 6% choosing to buy with 3 or more friends/family, outside the norms of single or couple ownership.
Despite 2023 being a tough year in the housing market, 3 in every 10 new purchases were young Australian's beating the odds and finding alternative pathways into property ownership, some outside of traditional avenues.
According to combined new data from Aussie and Lendi, 32% of new purchases in 2023 were from First Home Buyer’s (FHB’s) with the assistance of brokers, compared to the national FHB new purchase market at 22% (Source ABS).
Co-Founder and Lendi Group COO Sebastian Watkins said, “In the face of rising interest rates and cost of living pressures we’ve seen purchasers, especially First Home Buyer’s turning to brokers for assistance to understand the different ways they can enter the market.”
“On the back of this professional advice, Lendi and Aussie brokers have helped First Home Buyer’s beat the odds, with this cohort outperforming the First Home Buyer market by 10%.
Following the Queensland Government’s First Home Buyer grants doubling to $30,000, Lendi Group has seen Queensland outperform the First Home Buyer new purchase market, reaching 45% of all new purchases during the first month of the year.
Lendi Group has also seen a significant return to the ‘bank of mum and dad’, with Guarantor Loans more than doubling in 2023, compared to the year prior from 1.8% to 5%. This is despite only a limited number of lenders offering these options in market, including only three of the big four.
“Those purchasers who were able to leverage the equity provided by guarantors, often from parents or guardians via Guarantor Loans, were able to enter the market with a deposit, on average, of $38,000. For the remainder of First Home Buyers, they had to fork out over double that, with an average deposit of $103,000”.
“In addition, a First Home Buyer without a Guarantor Loan borrowed had an average property purchase price of $621,000. This compared to a First Home Buyer with a Guarantor Loan, with an average property purchase price of $763,000. The current average interest rate with a Guarantor is 6.14% versus without a Guarantor 6.28%.”
Average mortgage size | Average purchase price | Average interest rate | Average deposit | |
Non Guarantor | $518,000 | $621,000 | 6.14 | $103,000 |
Guarantor | $626,000 | $763,000 | 6.28 | $38,000 |
Source: Lendi Group, based on a new purchase with a home loan in 2023 at current variable interest rates, and a guarantor applicant with 5% genuine savings.
Kim Horan is a broker from Aussie St Mary’s in Sydney’s Western Suburbs, an area that covers the highest amount of First Home Buyers in the nation.
“We have seen an increase in new purchasers looking to find alternative pathways into their homeownership and going down the Guarantor Loan route is a great way that parents can help out their kids without having to have cash on hand to loan out.”
“It’s a more readily available option for most parents that requires very little besides trust in their kid’s ability to pay the loan. Of course, it’s vital that they have that confidence, and I would encourage anyone thinking of going Guarantor for a loan to have a frank and honest discussion about the applicant’s ability to meet the loan requirements under a variety of circumstances before committing to being Guarantor”.
Savvy FHB’s are also looking long term with 2 in 10 ‘rentvesting’, that is purchasing property for the sole purpose of renting it out.
5% of FHB’s purchased outside the traditional single or dual occupancy compared to just 2% the year prior.
“It is not common knowledge that you can have up to four people on a home loan meaning that buying with friends and family is absolutely an option for consideration and something that our brokers can help with.”
Over the last 12 months over 70% of the lending market was managed by brokers, highlighting the continued value of professional advice when making these important decisions.
“Our message to those considering entering the property market for the first time is to reach out to a broker and ask about your options. There are multiple options a broker can help you work towards, including incentives which you didn’t know were available and a mortgage broker is best placed to support you through this process,” said Mr Watkins.
About Aussie
Aussie was founded in please visit 1992 and was widely credited for bringing competition to the Australian home lending industry. For nearly 30 years, Aussie Brokers have put progress within reach of more Australians, helping over one million customers with their home loan. Today, Aussie is part of the Lendi Group; and has the largest retail brokerage footprint across Australia. For more information about Aussie, please visit Aussie.com.au or call 13 13 33