Best countries for first home buyers revealed, Australia ranked 27th

Getting into the property market is no easy feat, and according to research from Compare the Market, Australia is one of the worst countries to be a first home buyer. Placing 27th in a comparison of 35 OECD countries, Australia performed worse than New Zealand (19th) and other big players such as the United States (18th) and the United Kingdom (24th).

Why did Australia rank poorly?

Coming 27th, Australia is in close company with Ireland (26th), Greece (25th), and Switzerland (28th), due to various factors such as a low increase in house prices of only 116% between 2015 and 2021, having a negative disposable income to cost-of-living ratio of -7.8, as well as having low percentages of properties owned outright by people (30.6%).

Research conducted by Compare the Market found that the sentiment was also shared by the Australian public, with more than 1 in 2 Australians (54.6%) believing that getting onto the property ladder is extremely hard. Less than a tenth of the respondents (7.8%) thought that it was extremely easy to get into the property market in the current environment.

Outlook for saving to buy a first home is also quite bleak according to Australians, with 39.4% saying that they would expect to save for 5 to 10 years to afford their first home.

A further 21.1% are saying that they would expect to save for more than 10 years in order to have enough money to buy their first house. Lastly, Compare the Market’s research found that the majority of Australians believe (41%) that the average age for the first home buyer is between 30 and 34 years old, which is not too far off from the actual average age at 36.

Which countries were the biggest surprises?

Slovakia made the top of the list as the best country for first home buyers for a variety of reasons, including having a very low average interest rate of 1.46% (one of the lowest in Europe), as well as a comfortable disposable income to cost-of-living ratio of 1.5%.

Hungary came second with a 181% increase in house prices from 2015 to 2021, while Lithuania rounded out the top three with a comfortable disposable income to cost-of-living ratio of 28.3%. At the bottom of the index was Mexico, due to its high average mortgage interest rates of 11.19%, while Iceland and Sweden came second and third last respectively for a variety of reasons, including very low disposable income to cost-of-living ratios.

The results of the index are based on a specific methodology put together by Compare the Market and include analysis on factors such as average mortgage interest rates, increases in house prices and available government support. To see the breakdown of how each country ranked on Compare the Market’s best countries for first home buyers index, please visit here.