Our property markets have been surging this year with double digit growth in sight for all our capital cities.
And now that more Australians feel secure about our economy in general, and their jobs in particular, this will only place more impetus on our markets.
This is showing itself as FOMO (fear of missing out) - when homebuyers and investors are scared the market is running away from them.
They feel they must get into the market and this is showing with even secondary properties selling well above their vendor’s expectations.
A recent survey conducted by Savvy has revealed 91.6% of Australians agree that property prices are becoming “unaffordable” in the current market.
The survey polled 905 Australians about their attitudes and behaviours regarding housing affordability.
- 9.8% of those polled said they had purchased a property during the COVID-19 pandemic; 27.6% said they are considering buying within the next twelve months.
- Almost a third of respondents (32.9%) are “very worried” that the current housing market is out of the reach of ordinary Australians. 39.3% said they “worried”, bringing the total of those concerned to almost three-quarters: 72.2%.
The main reason respondents cited for holding off on buying is that they are still saving for a deposit (33.2%) followed by general housing unaffordability (32.4%). 14.6% of respondents said they were waiting to ride out the COVID-19 pandemic.
This leaves many would-be home buyers in a double bind, as 28.6% say that they’re concerned if they don’t buy soon, they’ll be left behind.
When asked why property has become so out of reach:
- 26% cite foreign ownership as the reason,
- followed by record low interest rates (20.3%) and
- an oversaturated investment market (18.6%).
- 33.9% of people said that the end of JobKeeper/Seeker stimulus will force down prices, when asked if the measures had any impact on the real estate market.
Further, 29.8% said they were prepared to devote 20% of household income to home loan repayments; 25.7% said 30%; a staggering 20.6% said over 30%+.
Devoting over 30% of household income toward mortgage repayments is considered “mortgage stress” in the finance industry. 26.9% of those surveyed said they are currently experiencing mortgage stress.
Savvy Managing Director Bill Tsouvalas says that this should be cause for concern.
“We’ve had a general feeling that the housing market is out of reach for Australians, but it seems that COVID-19 and other measures such as HomeBuilder and the First Home Buyer Deposit Scheme has still left most would-be home buyers worried if they don’t buy now, they’ll be shut out forever.
27% said they would save more of a deposit to secure their place in the property market; 23.7% said they’re waiting for a price crash.
21% are prepared to relocate in a regional or rural area.
- Also read:Here’s how to avoid these 12 common reasons property investors fail to build a Multi Million Dollar Property Portfolio
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- Also read:Sydney property market forecast for 2024
- Also read:Boom to bust: What makes property prices rise and fall
- Also read:This week’s Australian Property Market Update – Latest Data, State by State November 28th, 2023
Housing Affordability & Sentiment Survey 2020-21