Rising house prices are extracting a toll on homebuyer confidence, with fresh research showing positive sentiment in property is slipping fast, while fewer than half of the respondents to a recent survey said they considered now was a good time to buy.
Research conducted by Finder showed that while…
Rising house prices are extracting a toll on homebuyer confidence, with fresh research showing positive sentiment in property is slipping fast, while fewer than half of the respondents to a recent survey said they considered now was a good time to buy.
Research conducted by Finder showed that while 74 per cent of respondents said they expected property prices to rise in the next 12 months, just 49 per cent said it was currently a good time to buy.
The results were a marked contrast from Finder’s previous survey, which showed two in every three consumers believed it was a good time to buy in December.
Finder head of consumer research Graham Cooke said the proportion of Australians that considered current conditions conducive to purchasing property was now at its lowest ebb since the pandemic-related lockdowns started last year.
“As lockdowns rolled out across Australia and open house inspections declined, Finder’s Property Positivity Index nosedived only to recover again as the housing market sprang back to life,” Mr Cooke said.
“Both the rock-bottom cash rate and FOMO have turbo-charged prices but fears of a property bubble are making many Aussies pessimistic that now is the time to buy.”
ME Bank’s Quarterly Property Sentiment Report showed a similar theme, with overall sentiment plunging amid concerns over housing affordability.
The report said 91 per cent of respondents considered housing affordability to be a big issue, with 93 per cent of first home buyers saying it was their top concern.
ME’s head of loans and personal banking Claudo Mazzarella said confidence surged during the pandemic last year as property prices and interest rates both fell, but with values marching upwards buyers were becoming nervous, particularly those looking to enter the market.
Mr Mazzarella said in addition to affordability, supply concerns had contributed to the overall sentiment fall.
He said 60 per cent of respondents believed there wasn’t enough choice in the current market, a 17 per cent rise since January.
The supply concern is higher regionally, with 65 per cent of those surveyed outside of major cities saying there was not enough choice.
“With more city dwellers moving to sea or tree change areas, supply is dwindling and adding pressure to prices,” Mr Mazzarella said.
On the investor side, Mr Mazzarella said many appeared to be keen to cash in on high prices, with 23 per cent saying they would sell property in the next 12 months, compared to 11 per cent of owner-occupiers.
More than half (52 per cent) of the first homebuyers surveyed said they were looking to buy in the next year, followed by 40 per cent of investors and 21 per cent of owner occupiers.
Sydneysiders were the most likely to buy (38 per cent), while 32 per cent of Victorians said they would buy in the next 12 months.
“Although overall sentiment is lower among first home buyers, our findings show they are still eager to buy property over the next year,” Mr Mazzarella said.
“There’s also a sense of ‘fear of missing out’ in the current market, which can be a key driver for this behaviour.”
