Australian home buyers delay major purchases into 2011
Property, new cars, holidays on the backburner, Homeloans research shows
A poll released today by mortgage provider Homeloans Ltd shows that almost half (45 per cent) of Australian home buyers will delay purchasing a property in 2011 due to rising interest rates and the cost of living. And one in three of those will put all major household spending – such as a new car, holiday or consumer goods – on hold for 2011.
According to the Homeloans Home Buyer Barometer Q1 2011, which surveyed 2000 Australian first home buyers, homeowners and investors, of those who will delay buying a property, only six per cent are planning to do so within the next six months and 74 per cent have reconsidered how much they are able to spend.
Tim Holmes, Homeloans’ chairman and chief executive officer, says the research shows Australians are taking a cautious approach to purchasing property in 2011.
“In my experience, such overarching caution is unprecedented outside of an economic downturn,” Holmes says. “But it’s a complex economic situation at present.
“There are now so many variables which have a profound effect on the Australian economy and consumer confidence, such as the recent floods and the just-announced flood levy tax. These obviously create some uncertainty.
“Whilst it’s difficult to predict what the RBA will do with official interest rates in light of the recent disasters, it’s clear that concerns about finances are keeping Australians on their toes. The uncertainty facing consumers when making a major investment such as property always justifies the need to exercise caution.
“Mortgage repayments account for a substantial portion of household income, and the risk of such repayments becoming unaffordable – whether that’s due to rising interest rates, an increase in other living expenses, change in employment circumstances or other factors – is something that all borrowers must consider.”
Of those surveyed for the Homeloans Home Buyer Barometer, 52 per cent plan to save for a larger deposit, with more than a third admitting they will follow a strict budget to achieve this, followed closely by cutting back on luxuries, such as eating out.
