A buyer’s borrowing capacity has topped the list of what’s most important when purchasing a home.
In NAB’s Q3 2022 Residential Property Survey, 82% of property professionals surveyed said the amount of money buyers were prepared to borrow to buy was the biggest factor, up from 74% a year ago before interest rates started to rise.
The analysis involved 350 real estate agents, property managers, property developers, asset managers, fund managers and property owners/investors across Australia.
“Our survey also found the old adage of ‘location, location, location’ continued to hold true for many with 60% highlighting good local shopping, restaurants and other amenities as key,” said NAB executive home ownership Andy Kerr (pictured above). “House size was increasingly important at 57% (up from 50% in 2021).”
Kerr said in contrast, fewer highlighted buying a house instead of an apartment (45% down from 53%), land size (44% down from 52%), having a work or study area (21% down from 26%) or being in a regional area (16% down from 21%) as key considerations.
“The market is starting to see a shift as Australians consider affordability in a rising rate environment,” he said. “A trend we are seeing emerge from the pandemic is more Aussies considering apartments over houses for the first time since the survey began, driven by return to office working and caution on borrowing amounts.”
Kerr said affordability and rising interest rates were absolutely part of the equation for home buyers.
“In a rising rate environment, where people are uncertain on when the rising rate cycle will end, Australians are more cautious on what they can afford,” he said. “In terms of being able to pay a loan, it’s important to remember that banks ensure customers can appropriately manage their repayments should interest rates rise.”
Kerr said Australians were also starting to think about what the balance of their working week would look like as they returned to the office more often.
“Location is still one of the most critical buying factors and flexible working is here to stay, so where Aussies buy continues to be important,” he said. “We all love walking to our local café or shops and this has continued to be a trend in the survey.”
Kerr said NAB knew there were some people who were feeling the pressure of rising interest rates.
“For anyone who is concerned, please get in touch with your bank, we are here to help,” he said.
