Australians still uncertain about property
Despite widespread claims that we’re in a buyers’ market, many Australians are still uncertain about investing in property, shows the latest Homeloans Home Buyer Barometer.
In a survey of 2000 Australian homeowners and homebuyers this month, opinions were widely varied on whether it’s a good time to buy. One in three were unable to give an opinion, with many claiming that too much uncertainty exists to have confidence one way or the other. Additionally, 48 per cent believe the market is right for investment, while one in five respondents were adamant that now isn’t the time for property, believing that prices were still over-valued.
“The volatility of property and equity markets in recent years is leaving home buyers cautious,” says Homeloans national marketing manager, Will Keall.
Concern in the household sector was cited by the Reserve Bank of Australia (RBA) in its statement on monetary policy accompanying last week’s decision to keep the official cash rate on hold, further highlighting continued caution in consumer spending and borrowing.
Keall was apprehensive about predicting that the market would rebound in the short-term, but insists that property is a medium to long-term investment.
“With nearly one half of those surveyed claiming now is the time to buy, it does suggest that the market is on the way back up,” he says.
“While many of these respondents may not necessarily believe that the market has bottomed out, they anticipate prices to increase in the medium term and are seeking to take advantage of the abnormally high quantity of properties for sale in most parts of the country.”
However the other half doesn’t share the optimism, the research shows, with many believing that every time confidence appears to grow, conditions change and the market returns to a state of prudence.
In August last year, the Homeloans Home Buyer Barometer showed that Aussies had a growing appetite for property, with respondents in most states revealing that the biggest planned expenditure for consumers this financial year was to be a new home. Yet by January 2011 the barometer demonstrated that concerns about finances was set to prompt a year of caution in the property market.
“A lot has changed in the sentiment of consumers and industry experts alike,” Keall says.
“Only a few months ago we were all told to brace for a series of interest rate hikes in the early part of 2011. Then experts were saying we would be unlikely to see one before August, before the release of the March quarter inflation data prompted them to review their predictions again.”
Whether or not rates have stabilised, the general concern among those against buying property in the current environment is increases in the overall cost of living – with the natural distasters around Australia and the threat of a carbon tax exacerbating these.. The RBA, however, insists that inflation is within target and that increased prices resulting from weather affected production losses will revert to normal later in the year.
What are your thoughts?