Rising house prices are encouraging one in four potential homebuyers to move.
NAB’s latest Behavioural Special Insight Report found that a quarter of Australians believe now is the time to enter the housing market, on the back of slowing month-on-month gains in dwelling prices.
Dwelling values grew by 0.6% in February — despite it marking the 17th month of consecutive growth, it is the slowest monthly increase since October 2020, according to CoreLogic.
Andy Kerr from NAB, NAB executive for homeownership stated that the slowing trend towards price growth and expected increases of housing supply over the next year would likely drive purchasing intentions.
“Australians remain positive about the property market — we currently expect more subdued property price growth in 2022, with gains of around 3% compared to 21% in 2021,” he said.
“However, the market remains competitive and for many Australians buying a home can be a daunting experience.”
Is it the right time to buy?
John McGrath is McGrath Estate Agents’ director. McGrath stated that buyers should think about their financial needs and personal goals, regardless of current market prices.
“Over a typical decade, you’re likely to see one boom or strong growth cycle, which we’re in now; one slower period when prices can sometimes pull back, and a bunch of years where not much happens at all,” he said.
McGrath states that buyers should not view a home as just a place to live, but as a financial investment.
“Whatever you pay today is going to look cheap in 10 years’ time. So, forget market timing — get the location right, only buy quality, keep within your budget, and most of all enjoy your new home,” he said.
NAB research found that Australians are more inclined to purchase a property in certain states than to buy a house.
New South Wales statistics show that 24% of people believe now is the best time to invest, and 22% disagree.
The largest gap is found in the ACT. 33% of Australians believe investing is right given current circumstances. 17% disagree with buying a home.
Renovation plans remain high despite cost concerns
The NAB report also shed light on Australians’ intentions to renovate or upgrade their homes.
While renovation plans are starting to be affected by inflation, around one-third (33%) of Australians believe that now is the right moment to renovate.
Half of Australians who have done renovations think it is harder to complete their projects. This can lead to higher costs.
15% of Australians will renovate their property in the next 12 months. The ACT boasts the highest percentage of homeowners planning to renovate in Australia, at 37%.
“Aussies are among the most active renovators in the world and love to make a home truly their own, but it’s clear rising costs have made it more difficult to budget,” Mr Kerr said.
“While many will still pursue renovations this year, it’s incredibly important to have a buffer for the unexpected costs that are likely to pop up.”