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Almost all Generation Z borrowers face challenges when buying a home, according to Mortgage Choice, which has called for brokers to help ease pressure on first-time buyers.
Problems causing delays or complications to property purchases had a disproportionate impact on younger borrowers in the December quarter, new Mortgage Choice research has found.
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Just 4 per cent of Gen Z respondents said they faced no challenges when buying a home, according to the quarterly Mortgage Choice Home Loan Report, which drew on home loan submission data from Mortgage Choice and a nationally representative survey of 1,000 consumers.
That figure compared to 34 per cent of Millennials, 57 per cent of Gen X, and 70 per cent of Baby Boomers.
Generation Z refers to people born between 1996 and 2010.
According to the research, the four biggest hurdles that caused delayed or complicated their property purchases for borrowers of all ages were:
- Uncertainty about how to calculate or budget for additional costs.
- Uncertainty about how to negotiate or make an offer on a property.
- Confusion about the home-buying process, including specific terms like stamp duty or conveyancing.
- Issues with comparing or evaluating home loan offers.
Reflecting on the research, Mortgage Choice CEO Anthony Waldron said: “It’s understandable that Gen Z face the most hurdles when buying property, given buyers in this age group are usually buying property for the first time.
“Purchasing a property can be a daunting process, especially for those who’ve never done it before, which is why it’s so important to speak to a mortgage broker early in the process.”
Waldron stressed that brokers can help simplify the home-buying process.
“A broker will help buyers understand their borrowing capacity so they can refine their property search and bid at auction with confidence. And, when they’re ready to apply for a home loan, brokers will guide them through the process from application through to settlement,” he said.
Affordability takes centre stage
The same Mortgage Choice research found that the most important housing-related issue for all generations was affordability.
This was felt most keenly with Gen Z, where 66 per cent of respondents ranked affordability as the most pressing problem.
Insufficient support for first home buyers was ranked second, by 38 per cent of Gen Z, while 34 per cent said the highest priority task was increasing the number of homes available.
Yesterday (12 February 2025), federal Treasurer Jim Chalmers called on Australia’s regulators to update their guidance to make it easier for Australians with student debt to take out a mortgage and buy a home.
The news will be a boon for first-time buyers and for brokers, who have argued that current rules create a barrier as the debt drastically reduces serviceability, sometimes up to tens, if not hundreds, of thousands of dollars.
Mortgage Choice has also found that housing-related issues are becoming increasingly important to voters as another federal election approaches.
[Related: Housing issues grow in importance for voters as election looms]
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