Feeling apprehensive about entering the property market this year? Research reveals that you are not alone. According to realestateVIEW.com.au’s recent ‘Appetite to Buy’ Survey, Australians are keeping a concerned eye on a range of issues from interest rate fluctuation, to housing affordability and the cost of living. These issues appear to be wearing down buyer confidence, despite assurances from the experts that 2012 is a great year to buy.
The research has revealed that just 32.7% of the 1,475 consumers who took part in the survey are looking to buy this year. This represents an 8.9% decrease from 2011, further indicating a resounding reluctance to enter the property market. The key issues impacting on the decision to buy include interest rates (48.5%), housing affordability (47.6%) and increasing household expenses (41.6%).
February rate rise hurting big four
As a consequence of the February rate rise, more than half of consumers are now either considering smaller lenders or refinancing to a smaller lender (57.5%). Interestingly, buyer confidence was not improved by the November and December interest rate cuts, as indicated by 65.2% of respondents who said the rate cuts did not encourage them to buy.
Additionally, 41.3% of respondents also believe further interest rate rises will keep buyers out of the market this year. More than a fifth (22.6%) of participants claimed they had plans to buy this year until last month’s shock decision by the big four to raise interest rates.
The ‘Great Australian Dream’
Interestingly, despite rising preferences for apartment living, owning a house still remains the ‘Great Australian Dream’, with 79% of respondents looking to buy a house over a townhouse, apartment or unit. This has however been slowly decreasing when compared with previous years (82% in 2011 and 85% in 2010).
In 2012, three bedroom homes remain the clear front-runner for buyers (44%), with 4% of buyers looking to buy in the $1 million price bracket, a significant increase over last year (1.2% in 2011). This suggests that buyers are keen to capitalize on the cooling of prices at the top end of the market.
What’s in store for 2012?
The survey confirmed that for many Australians saving up for their dream property is a priority, with 20.5% of respondents having already saved a deposit greater than 40%. Yet for many, making a purchase means compromising on other areas, with 32.5% cutting back on living costs to boost savings.
Whilst for many of the states a likely growth resurgence is predicted, it appears that for 2012, most buyers are adopting a ‘wait and see’ approach. This appears unlikely to change any time soon, especially if the big four banks raise their mortgage rates this month.