Newspaper article Sunshine Coast Daily (Maroochydore, Australia)

Savings Train Begins to Fill; Generation Y Jumps on Board to Reach for Home Ownership Dreams, but It's Not Easy

Newspaper article Sunshine Coast Daily (Maroochydore, Australia)

Savings Train Begins to Fill; Generation Y Jumps on Board to Reach for Home Ownership Dreams, but It's Not Easy

Article excerpt

GENERATION Y is determined to boost its savings as it now sees this as the gateway to qualifying for a home loan, says leading mortgage broker, Loan Market.

At the same time, more than one third of young home buyers are saving at least 20% of their pay packet, according to the latest Bankwest/Mortgage and Finance Association (MFAA) Home Finance Index.

Most of these first time buyers appear slightly more optimistic about their chances of climbing the property ladder soon, and 37% of Gen Y home buyers feel their financial situation has improved in the last 12 months.

Loan Market chief operating officer Dean Rushton said lack of savings was one of the major factors holding back first home buyers from purchasing their first home.

Mr Rushton said a Loan Market online survey of 598 people found that 84% of 18 to 25-year-old respondents and 78% of those aged 25 to 40 wanted to prioritise savings this year.

aThe survey results indicate that Gen Y is following the message that to pursue the dream of home ownership you need to save,a he said.

aWith changes to the banks' requirements for a higher percentage of genuine savings post GFC, current potential first home buyers are having to work harder on savings than their predecessors in the previous decade.a

Mr Rushton said encouraging people to be better disciplined when it comes to saving was a key to getting more first home buyers back in the market.

aFirst home buyers have dropped like flies since the boosted federal government grant to first home owners finished at the end of 2009,a he said.

aOur own inquiries from first time buyers fell 15% in the second half of 2010 and reviving activity in the home finance market will depend on getting more people to enter the market.a

ABS data shows in the last six months the proportion of first home buyers is at the lowest point it's been in the past five years, contributing to only 15.7% of all dwelling purchases.

Mr Rushton said the federal government's $1. …

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