Aussies divided on property
Caution prevails – but there’s still confidence, latest Homeloans research shows
A poll released by mortgage provider Homeloans Ltd shows Australian homeowners and homebuyers are divided on whether now is a good time to buy property.
The Homeloans Home Buyer Barometer Q2 2011, which surveyed 2000 Australian first home buyers, homeowners and investors, shows that 48 per cent believe the market is right for investment, one in three (32 per cent) are unable to give an opinion – with many claiming that too much uncertainty exists – and 19 per cent are adamant that now definitely isn’t the right time to be buying.
“The volatility of property and equity markets in recent years is leaving home buyers cautious,” says Will Keall, Homeloans’ national marketing manager. “And with the cost of living continuing to rise, it means consumers are taking a wary approach.”
The high cost of living is the top financial concern for homeowners and home buyers, the survey found. Thirty seven per cent of respondents said increasing living expenses were their main concern over the next 12 months, which compares with 26 per cent in December 2010.
Conversely, interest rates are taking a backseat (22 per cent in April 2011 compared with 33 per cent in December 2010), whilst family-related costs are another worry, with nine per cent of respondents citing this is their main concern.
The greatest barriers to home ownership are high property prices (49 per cent), saving for a deposit (26 per cent), and fear of not being able to meet repayments (22 per cent).
“Despite these major concerns, with nearly half of those surveyed claiming now is the time to buy, it does suggest that the market is on the way back up,” Keall 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 were 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, however experts are now saying we are unlikely to see one before August.”
According to the Home Buyer Barometer, of those who are in a position to buy, new / off-the-plan houses or units or those requiring no renovations are the top preference at 60 per cent. Only 21 per cent are prepared to carry out renovations and 19 per cent would prefer to build their own.
KEY FINDINGS - Interest rates no longer top concern – dropped from 37 per cent in December 2010 to 22 per cent in April 2011
- Concerns over rising living expenses up from 26 per cent to 33 per cent
- Queenslanders are most concerned by high cost of living at 44per cent
- High property prices still perceived as biggest barrier to home ownership at 49 per cent, followed by saving for a deposit at 26 per cent
- VIC most concerned about high property prices at 58 per cent
- Western Australians are the most bullish about investing in property (59 per cent) compared with the rest of the country – but they’re more concerned about their ability to make repayments (29 per cent)
- Compared with the rest of the country, NSW is the state of renovators, with more than a quarter looking to buy a property that requires renovating
- South Australians are the most adventurous when it comes to building their own homes, with 29 per cent keen to build their own house or unit