Saturday, July 31

Many Aussies believe now’s not the time to buy property but still plan to: NAB survey


Despite widespread expectations property prices will continue to surge and many people believing now is not a good time to buy, Australians still plan to buy homes in coming months, data suggests. Picture: NCA NewsWire / Damian Shaw
Despite widespread expectations property prices will continue to surge and many people believing now is not a good time to buy, Australians still plan to buy homes in coming months, data suggests. Picture: NCA NewsWire / Damian Shaw

Despite widespread expectations property prices will continue to surge and many people believing now is not a good time to buy, many Australians still plan to purchase homes in coming months, data suggests.

Results from a National Australia Bank survey showed only 40 per cent of respondents believed now was the time to purchase real estate while 15 per cent intended to buy a home in the next 12 months.

NAB home ownership executive Andy Kerr said the appetite for Australians looking to buy a home was at an all-time high, with young people the most aspirational.

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Overall, 18 per cent of survey respondents were saving to buy but in the 18-29 group, that was almost 40 per cent.

“Despite the property price increases, first home buyers are going gangbusters: April was our strongest month on record (for mortgages) and we were up 87 per cent for the first four months of the year (compared to the same period last year),” Mr Kerr told NCA NewsWire.

“That was up nearly 10 per cent on the last four months of 2020.”

The appetite to buy a home is at an all-time high in Australia, NAB executive Andy Kerr says. Picture: NCA NewsWire/Joel Carrett
The appetite to buy a home is at an all-time high in Australia, NAB executive Andy Kerr says. Picture: NCA NewsWire/Joel Carrett

Regional markets were red hot last year as ‘sea and tree change’ buyers sought more land, causing prices in those areas to spike.

Buyers had in 2021 so far been seeking value, aided by greater flexibility in where they could work, Mr Kerr said.

First home buyers were increasingly taking out mortgages for inner city apartments as they returned to the CBD for work for at least some days of the week, he said.

With a significant housing supply shortage set to continue for some time, there is a fear of missing out – or a fear of bad timing, Mr Kerr puts it, as homeseekers worry about being priced out of the market.

With interest rates remaining at record lows and government incentives getting “great airplay”, the extra nudge for aspiring property owners was the First Home Loan Deposit Scheme, with the next intake round starting on Thursday, he said.

“People are realising it’s only marginally higher to buy a home than rent,” Mr Kerr said.

Still, most first home buyers will have to hunt hard for affordable properties after spending years raking together their deposit.

Australian Bureau of Statistics data released earlier this month showed the national mean price of residential dwellings was $779,000.

First Home Loan Deposit Scheme property price caps, effective July 1:

NSW – capital city, regional centres (Newcastle, Lake Macquarie & Illawarra) $700,000

NSW – other $450,000

VIC – capital city, regional centre (Geelong) $600,000

VIC – other $375,000

QLD – capital city, regional centres (Gold Coast & Sunshine Coast) $475,000

QLD – other $400,000

WA – capital city $400,000

WA – other $300,000

SA – capital city $ 400,000

SA – other $250,000

TAS – capital city $400,000

TAS – other $300,000

ACT – $500,000

Northern Territory – $375,000

Jervis Bay Territory & Norfolk Island – $450,000

Christmas Island & Cocos (Keeling) Island $300,000

National Australia Bank had its strongest month on record for first homebuyer mortgages in April. Picture: William West/AFP
National Australia Bank had its strongest month on record for first homebuyer mortgages in April. Picture: William West/AFP

Mr Kerr said it was good the caps had been raised.

“We’re seeing record growth in first home buyers so I think they’ve got it right,” he said.

“First home buyers always tend to buy smaller places in potentially up-and-coming suburbs.”

Meanwhile, time appears to be running out to lock in historically low rate home loans.

After NAB announced on Wednesday it was hiking its 2-, 3- and 4-year fixed rates for owner-occupied loans by up to 0.10 per cent, Canstar’s Steve Mickenbecker said the seemingly trivial increase followed a bigger rise in May and was “further confirmation that markets are expecting rates to move inside the Reserve Bank’s three-year time frame”.

All of the big four banks still offer 2-year fixed rates below 2 per cent, but Westpac is the only big four bank to offer a 1-year and 3-year fixed rate home loan below 2 per cent, Canstar says.

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