Is it time to buy property? Consumers keen, but experts not so sure: Finder

Is it time to buy property? Consumers keen, but experts not so sure: Finder
Is it time to buy property? Consumers keen, but experts not so sure: Finder

There's an increasing number of consumers who think now is a good time to buy property, however Finder.com.au's RBA Cash Rate Survey found experts and economists weren't so sure.

In April 2019, nearly 60 per cent of experts reported positive sentiment about housing affordability in Australia, however that number has now dropped to 17 per cent. 

 
Graham Cooke, insights manager at Finder, said economists clearly haven’t been persuaded by this year’s three RBA rate cuts when it comes to housing.
 
“Housing affordability cuts both ways. When it is high or economists feel positive, property prices can be relatively low meaning more Aussies have a chance to buy," Cooke said.
 
"The flipside of course is home values might be trending in the wrong direction and no one wants to catch a falling knife.
 
“When housing affordability is low or economists feel negative, the cheery news is that property values are on the way up, but unfortunately it also means that those ready to buy might not be getting a bargain,” Cooke said.
 
Peter Boehm of KVB Kunlun said the RBA cuts are actually doing more harm than good.
 
"house prices have been increasing (making it harder for first time buyers to get into the market), existing mortgage holders are maintaining repayments at current levels to help reduce their debt quicker, and therefore not spending this "freed up" cash," Boehm said.
 
“There's been little or no impact on the unemployment rate, corporate investment has not rebounded, business confidence is low, and the continuing reduction, and signalling of future rate reductions is sending negative messages to consumers about their economic outlook,” Boehm said.
 
Despite this lack of faith from economists, consumer sentiment is on the uptick.
 
The Finder Consumer Sentiment Tracker™ – established in May 2019 – surveys more than 1,000 Australians each month and among other things, asks consumers a simple yes or no question: do they believe now is a good time to buy property?
 
In October, 59% agreed it was a good time to buy property, up from 54% in May.
 
 
Cooke said consumers are likely responding to the positive news they are seeing about house prices in Australia.
 
“Buying property is still considered ‘safe as houses’ in Australia, but it’s taken with a grain of salt in many countries since the global financial crisis.
 
house prices don’t always rise and the economy doesn’t always perform well.
 
“We’re seeing house prices now increasing fairly consistently, while other economic factors have not really improved.“This shows that the surge in prices is likely due to cheaper borrowing from three RBA cuts of 2019, rather than an indication of an improving economy,” Cooke said.
 
“Nobody knows what’s around the corner, but the chances that this price boost is a dead-cat-bounce seems less and less likely as prices continue to recover,” Cooke added.
 
“First time buyers with a deposit saved may miss the good-value window if they don’t get into the market soon.
 
“If we keep seeing prices increase as dramatically as they’re doing now, the market will have fully recovered within a year,” he said.
 
Cooke said the key for anyone looking to save a deposit is to maximise their savings.
 
“You’ll find better ongoing rates with smaller banks such as UBank and ING and neobanks such as 86 400 and Up than you will with the bigger banks. A little bit of homework can go a long way to boosting your deposit,” he said.
 
Tags: 
Rba Rate Decision Finder.com.au

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