First home buyers are being denied housing choice

ScreenHunter_01 Jan. 27 23.41

By Martin North. Cross Posted from Digital Finance Analytics Blog

We just completed some analysis from our surveys on the attitudes of first time buyers. We cut data from our 2013 and 2010 data sets to compare and contrast. Back in the heady days of 2009/2010, first time buyers made up to 27% of all purchases, today is only 8%.

We looked at those in the main urban centres of Sydney. Melbourne, Brisbane and Perth. Comparing the two years, we see a shift away from purchasing houses, especially in Sydney and Perth.

Commute2Thus we see an expected rise in the proportion of first time buyers purchasing a unit.

Commute3When we compared the elements which influence a buying decision, we see a stronger focus on price in 2013. Schools are important, then access to transport. We see consideration of absolute commute times to be less important now than in 2010.

Commute5We asked about average commuting times, and on average first time buyers who bought in 2013 are spending more time commuting compared with those who bought in 2010. The average time spent travelling (there and back) in Sydney is now 160 minutes each working day. All the urban centres have seen considerable increases in travel times for recent purchasers.

Commute1We find that most first time buyers are driving to work, although public transport is also being used by some. Mixed means changing during the course of the journey, but excludes, for example, a local drive to park at the station, or a short walk from the station to the office.

Commute4We found that many first time buyers have had to trade-off more extended commuting times to purchase affordable property, and that for many, new developments on the outskirts of town have little or no public transport, which forces people onto the roads. Extended commuting times of course add additional stress to households, and leaves less time for leisure and family. Life-work balance is being impacted. Extended times are not only explained by location, but also by congestion. Those who purchased in 2010 are also spending more time travelling now, because of slower traffic speeds.

The current residential property development models for new housing seem to be forcing poor life-style choices on many first time buyers. Perhaps it is time for a more radical look at town planning as part of a review of first time buyer housing.

13 Responses to “ “First home buyers are being denied housing choice”

  1. myne says:

    Almost totally off topic, but I found the last two graphs very interesting – They add to confirming my long held belief that Melbourne is one of the best cities from a transport network perspective.

    With nearly the population of Sydney, and despite a marked climb in commute times, it is still nearly 40 minutes shorter on average.

    The obvious features:

    Highest percentage of walkers.
    Highest percentage of cyclists.
    Highest percentage of “mixed” (would love to see how this breaks down).
    Second highest percentage of Bus/Tram (betting about 80-90% of that is tram).
    Third highest percentage of Train (I found this a little surprising since the network is quite extensive).

    But the key figure in all of that, is the lowest percentage of drivers by a good 5%!

    What does this tell us?
    Better alternative (not road) transport networks contribute to:
    * Reduced peak traffic load on the roads
    * Lower overall commute times with similar population
    * Increased fitness?

    Any chance MB can do some breakdown/analysis on this topic?

    • It could also suggest that the extreme urban consolidation policies of Sydney (which are far stricter than Melbourne’s) have not worked and have likely worsened outcomes. Ross Elliott’s series of articles are well worth a read for those interested in this issue.

      • myne says:

        How much different is Sydney really?

        The major difference I’ve noticed is that the place is dominated by large freeways which change between 130 and 0kph at a moments notice, a disjointed (from the rest of the PT options) and expensive public train network, and a series of asphalt goat tracks in the centre.

    • speculator says:

      that is not surprising considering two things:
      - Melbourne being flat car culture inland city
      - Sydney having huge geographical and political issues building any infrastructure.

      Maybe it takes less time to get to the CBD in Melbourne but it takes a lot more time to get to a nice beach :)

    • wasabinator says:

      This is one of several reasons why I recently moved from Sydney to Melbourne.

    • Neville Gearless says:

      Not surprised Perth has the most rail travel by FHB’s. There was a 72km rail expansion in the late 90′s through a mostly vacant corridor and new housing has filled in all along its length since. The city is really well serviced by PT now. Surprised it still has the most car usage though (amongst FHB’s I presume), little contradictory..

  2. Ajaydee73 says:

    Who cares about first home buyers. They’re just whiners who weren’t smart enough to have a free uni education and buy a house when prices were 3 times incomes.

  3. DMc says:

    And state governments have incentive to encourage this trend.

    If a first-home buyer buys a “starter” property that is too small to raise a family, they will inevitably need to upgrade at a later date, incurring stamp duty costs and generating revenue for the state.

  4. avatar99 says:

    Wow, those commute times are outrageous. Think of the lost productivity, the emissions, the loss of quality of life! Surely momentum must be building for housing policy change.

  5. AK says:

    I don’t think the solution is better commute times to the city either. Most people I know living on the fringes of the cities would prefer to work locally; even people in the city I work wth that live in the city coming from other places wish that they didn’t have to work in Sydney.

    Sydney is a business hub; nothing more. The problem really is that extra population doesnt’ necessarily mean more jobs – e.g western sydney population is growing but work is still scarce compared to the city. People go to where the jobs are – if there were jobs in the outskirt areas then it wouldnt be as big of an issue. In Sydney the quality of life gets bette the closer you get to the city and that’s why people are fighting for it – (health costs per patient are given more money by the state in the cities as an example, council rates are higher in poorer suburbs, and the list goes on).

  6. The Claw says:

    Thank you very much planners. First home buyers are paying to the limit of their capacity and are now driving for 160 minutes per day.
    Is this failure of planning or success. If it is not failure then what does failure look like?

    Price of house = $400,000 + 160 minutes of skilled labour per day + $80 of petrol per week (?) + tolls + tires, maintenance, insurance…….

    These first home buyers must be having a love affair with their car. They should be taxed and the money used to build bike paths for honourable citizens who bought property near the CBD.