Login
ISCOVER
Aggregators have voiced concerns about the spending and borrowing habits of Australia's next generation of property buyers.
According to the Genworth Streets Ahead report, an increasing number of borrowers are using personal loans and credit cards to fund their deposits.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
AFG's state manager for NSW and ACT, Stephen Doyle, said at a recent aggregation leadership roundtable that this was a big concern.
"The average loan in NSW is now $545,000 and that's gone up from $50,000 last year," Mr Doyle said at the event, which was hosted by The Adviser and Genworth.
"So if you're adding a credit card or personal loan to that, which are at much higher rates, that's a recipe for disaster."
Mr Doyle also said that a lot of young people have unrealistic expectations.
"They live in their parents' five-bedroom home into their late 20s, they drive their parents' BMW, their first home is an investment property; I don't think they want to live in what they can afford," he said.
Vow Financial chief executive Tim Brown said it's never been more affordable to buy a new home – but that potential first home buyers are struggling because they spend too much.
"[Vow] had a young couple the other day making $400,000 between them and they couldn't save for a deposit," Mr Brown said.
"They were spending $50,000 on vacations, $50,000 on dinners out; it's about priorities and I think people's greed could really come back to bite them."
Aussie Home Loans' national head of retail, Vaughan Fowler, said an increase in first home buyer confidence hasn't been translating into transactions.
"Aussie's view on first home buyers – driven by John Symond's view – is that there is not enough incentive to build housing out in the outer western suburbs," Mr Fowler said.
"It's expensive for developers to build out there, so Aussie's view is that any government intervention geared towards first home buyers should be geared towards houses and new developments and areas where we want the population to grow."
[LinkedIn: What should the government do to help first home buyers?]
