Australians are showing more optimism about buying a home, a new report shows.
The latest quarterly Mortgage Choice Home Loan Report has revealed that 83 per cent of prospective buyers feel positive about entering the market, compared with 70% last quarter. But it’s easier for some than others.
According to Mortgage Choice CEO Anthony Waldron, buyers are recalibrating their perspective on interest rates and whether there is in fact a ‘right time’ to buy property.
“After hearing a range of predictions on rate movements, from forecasts that rates would fall multiple times in 2024, to speculation that rates may rise and that cuts won’t come until 2025, buyers are recognising that perhaps the right time to buy is simply when they’re ready”, he said.
In the current economic climate, however, the outlook and experience of workers in different industries diverges, with 65% of homeowners working in healthcare reporting that they now expect it to take longer to pay off their mortgage, compared with 51% of those in professional services.
In fact, workers in education and healthcare are more likely to move out of the city to buy property, whereas workers in professional services were more likely to feel they’ll benefit from Stage 3 tax cuts to save for a home and less likely to compromise on the size of property they planned to buy.
There is also a stark contrast between the expectations and reality, with the lack of affordable housing presenting a hurdle for 62% of prospective buyers, who have found their search for property is taking much longer than they anticipated.
The research shows 82% of prospective buyers are making compromises on their buying plans. These include planning to:
– buy in a regional area/further out from the city – 60%
– buy a smaller house – 50%
– buy an apartment instead of a house – 35%
– buy a duplex – 23%.
There are indications the rental market is attracting investors, with the data showing the value of Mortgage Choice investment loans increasing 20.7% year on year.
The data also shows that the national average loan size rose to $594,864 – up 9% compared to the June quarter FY23. For the second quarter in a row, the markets that recorded the most significant growth were SA/NT, Queensland and WA; however, NSW/ACT and Victoria/Tasmania remain the regions with the highest average loan size in Australia. These figures are fairly consistent with the PropTrack Home Price Index, which revealed that despite slower growth, annual national home prices grew 6.55% in June.
The PropTrack Rental Report for the June 2024 quarter revealed that significant demand for rental accommodation remains, supply is still limited and advertised rents remain elevated, with these conditions expected to persist.
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