High Rent Pushing Gen Y to Buy Their First Home

MANY renters are buying their first home rather than fork out for exorbitant rent, new research shows.

First home buyers are dipping their toe back into the market while prices and interest rates are low.

New research has revealed they are more confident about buying a house now than they were six months ago. Rising rents is one of the key factors that has first-time buyers considering if it is time to take the plunge.

Latest CBA/Mortgage & Finance Association of Australian research has found that current high rents mean two-thirds of first-time home buyers were re-evaluating the trade-off between renting and buying.

It found about 17.2 per cent of first-home buyers were planning to enter the housing market sometime in the next 12 months.

But almost 70 per cent say they are still holding back due to the fear of servicing higher debt mixed with a fear of future job redundancies.

About two-thirds of first-home buyers believe rentals are too expensive, and about 40 per cent feel they are caught in a rental trap, according to Commonwealth Bank executive general manager of third party banking, Kathy Cummings.

She says in many cases it is cheaper to buy than rent and first-home buyers appear to be working productively towards raising the required deposit to get into property.

According to RP Data research analyst Cameron Kusher weaker market conditions across most capital cities means there are opportunities to find bargains.

Reported by Michelle Hele, Courier Mail – July 2012