Australians’ demand for housing is continuing to increase despite expectations that already high property prices are set to rise, according to QBE’s third annual report into mortgage and property market sentiment and behaviour, the 2013 Mortgage Barometer, prepared for QBE LMI.
The report presents current trends in mortgages and property and Australians’ perceptions of the market, tracking year-on-year changes while also considering topical influences on market sentiment.
Jenny Boddington, CEO of QBE LMI, says that the 2013 barometer shows low interest rates and property price dips from 2010 to 2012 are continuing to have a positive effect on Australians’ appetite for property.
More than twice as many Australians are looking to buy in the next 12 months than those that bought in the past 12, while 69% of respondents intend to purchase property in the next five years, an 8% increase from 2012.
“The perception that now is the best time to buy continues to exist,” says Boddington. “In fact it’s even clearer in 2013, with one in three [32%] thinking it’s best to buy in the next six months, and half [52%] believing within the next 12 months is best [up from 26% and 40% respectively 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,” she adds.
Low interest rates have provided some relief to borrowers, with almost half saying they were able to get ahead in their mortgage repayments last year. Low interest rates have also had a positive impact on those looking to enter the market, with one in three saying they are encouraged to buy sooner.
Although demand has remained constant, the report shows that what Australians are looking to buy is changing. While existing houses are still the preferred property type, interest in this market is declining in favour of new developments (35% are looking to buy a new house in 2013, compared to 29% in 2012).
“Interestingly, the trend towards new homes was not just limited to the one buyer group,” says Boddington. “While one in two first home buyers said they were more likely to consider purchasing a new house [15% increase from 2012], there was also increased interest from investors and owner-occupiers in 2013 [8% and 5% increase, respectively].”