The number of first-time buyers is on the rise, as millennials save more for a property than they do for holidays.
New data released by Westpac shows that savers between the ages of 25 to 34 are more focused on putting money aside for a future home.
Over the past two months, Westpac has seen an increase in the number of first home buyer loans issued compared to the same period in 2017 and 2016.
At the same time, data from Westpac Life, a savings account that allows customers to save for specific goals, shows the most popular savings goal among the age group is ‘Home and Property’. An average 70% of these millennial customers’ total savings is being put away for a future home.
Kathryn Carpenter, Westpac’s head of savings, said first home buyers are being diligent with their savings and digging deep to save for a home.
She said, “Millennials are often depicted as a generation more focused on life experiences and living in the ‘now’. However, our research shows that many are in fact taking saving for a home deposit seriously and prioritising it above other goals including travel or lifestyle.
“It’s great to see our millennial Westpac Life customers making the most of their savings plans and the timing could not be better with the current cooling of the property market.”
Westpac has launched an extra bonus interest rate to help millennial savers own their first home sooner.
Carpenter added, “To save up to 20% for a deposit, you’re looking at over $100,000 for the average dwelling in Australia. This is a substantial amount of money for young people to save in the current climate, even with cooling property prices.
“To give first home buyers an extra boost we’ve introduced an additional bonus rate for those saving for a home. It is a small way to give first home buyers some extra help on their journey to owning their first home.”
Westpac Life data also revealed the younger end of the millennial spectrum (18-24) are already starting to save for a home, with the average balance of their ‘Home and Property’ category sitting at about 50% of older millennials’ average.
However, ‘Holiday and Travel’ is still the most popular goal for this demographic. Across all other age groups ‘Holiday and Travel’ is also the number one savings goal, with those over 55 saving the most for their ‘Holiday and Travel’ goals.
Westpac Life customers can receive the extra bonus interest for six months when they add a new ‘Home and Property’ goal during the offer period. With the existing bonus interest, their monthly balance can grow by an additional variable 1.0% p.a. on top of the competitive variable 1.5% p.a. base rate.
From Australian Broker