Homeownership sentiment improves as demand for new homes rises: QBE LMI survey
Australian feels more confident about buying residential property and of its potential to build wealth, the latest QBE LMI Mortgage Barometer report has found.
The survey or more than 1,100 home owners and prospective homebuyers also found a distinct shifting in buying tastes with a higher percentage of first-home buyers, second homebuyers and investors contemplating buying a new house or apartment rather than an existing one.
Thirdly, there also appears to be a shift towards buying units with respondents considering buying detached houses in 2013 than in 2012.
Nearly one in three (32%) of those surveyed believe the next six months is the best time to buy residential property, up from 26% in 2012 while more than half believe the next 12 months is the best time to buy, up from 40% in 2012.
“This sentiment is in line with almost half of respondents (47%) thinking that property prices will increase strongly in the next three years and more than a third believing prices will be at least 10% higher in 2013,” says Jenny Boddington, chief executive officer of QBE LMI.
Other results also point to the belief that property will be a better investment vehicle in the coming years with 17% of those surveyed classifying it as a “reliable blue-chip investment” – up from 16% in 2012; 14% considering it as a way to build wealthy relatively quickly (up from 8% in 2012) and 22% considering it an investment to fund retirement (up from 19%).
In addition, significantly fewer respondents now believe property should only be one part of a diversified portfolio (17% in 2013 versus 29% in 2012) - in other words more Australians believe that the asset class can stand on its own as an investment vehicle.
“The slow recovery of the share market post-Global Financial Crisis (GFC) has likely had a large part to play in these perceptions, with dwelling values outperforming the ASX 200 Index on capital appreciation over the last decade to 2012, and proving to be far more stable (largest 12-month fall of 5% vs. 40%+ for shares),” notes the report.
While buying an existing home remains the most popular choice for all buyers, the survey did find a rise in appetite for new homes across first-home buyers, owner occupiers and investors.
In 2013, more than a third of respondents (35%) said they were looking to buy a new house compared with 29% in 2012.
Interest is a new home highest among first-home buyers, which is not surprising given the changes in first-home owner grants in NSW and Queensland, incentivising only new home purchases, with Victoria, the ACT, South Australia and Tasmania all to follow suite in the coming months and years.
Nearly one in two (49%) first-home buyers are considering a new home compared with 34% in 2012.
Among owner-occupiers, more than a third (34%) are considering a new home over an existing one (up from 26% in 2012) and among investors, 32% are considering a new home (up from 27% in 2012).
Perhaps signalling a desire for a more affordable property, but possibly also reflecting the rise in apartment living in capital cities, the survey found a distinct shift towards purchasing units among owner occupiers and investors with demand for generally more expensive detaching housing falling.
Desire for an apartment remains high among first-home buyers at 32%.
