CANSTAR report shows nation’s mass optimism about property, even in cities where the opposite is already occurring
CANSTAR report shows nation’s mass optimism about property, even in cities where the opposite is already occurring
Nearly four out of five Australians don’t see house prices falling in their state over the next two years, according to a new report by comparison site CANSTAR.
CANSTAR surveyed 2,026 consumers on their views on property prices and home buying. Nationally, 47% of respondents expected steady growth in house prices, with a further 8% predicting prices would ‘skyrocket at some point’.
Just 11% of respondents thought prices could fall in the next two years.
Even in Perth, where according to CoreLogic, values fell 2.5% over the past year, just 7% of respondents thought prices could fall. Conversely, 37% of Perth respondents believed prices could rise.
Sydney was the most pessimistic city, with 16% predicting values would fall. CANSTAR’s results were timely, with the Harbour City experiencing a quarterly decline of 0.6% in October.
Are Australians just naive?
With many Australians preparing to invest in property, driven by optimism on house prices, CANSTAR’s results may be cause for concern.
QBE recently published their 2017-2020 Housing Outlook, which predicted that the price of units would fall in four of Australia’s capital cities.
Unit prices in Sydney would fall by 3.8% over the three years, with units in Melbourne and Brisbane falling by 4.8% and 7.2% respectively.
However, house buyers are far better placed, with falls only predicted for Sydney and Darwin.
Ammunition for APRA
CANSTAR’s survey also looked at stretched borrowers, asking respondents how many months buffer they had in their mortgage.
Almost half (43%) had less than three months buffer in their mortgage. When it came to saving, 29% didn’t save any money and 26% saved less than 10% of after-tax income.
The results come in the same week that APRA signaled a renewed focus on borrowers with a low ‘net income surplus’. The prudential regulator is concerned that misuse of living expenses benchmarks is producing mortgage-holders who are vulnerable to shocks.
Nearly four out of five Australians don’t see house prices falling in their state over the next two years, according to a new report by comparison site CANSTAR.
CANSTAR surveyed 2,026 consumers on their views on property prices and home buying. Nationally, 47% of respondents expected steady growth in house prices, with a further 8% predicting prices would ‘skyrocket at some point’.
Just 11% of respondents thought prices could fall in the next two years.
Even in Perth, where according to CoreLogic, values fell 2.5% over the past year, just 7% of respondents thought prices could fall. Conversely, 37% of Perth respondents believed prices could rise.
Sydney was the most pessimistic city, with 16% predicting values would fall. CANSTAR’s results were timely, with the Harbour City experiencing a quarterly decline of 0.6% in October.
Are Australians just naive?
With many Australians preparing to invest in property, driven by optimism on house prices, CANSTAR’s results may be cause for concern.
QBE recently published their 2017-2020 Housing Outlook, which predicted that the price of units would fall in four of Australia’s capital cities.
Unit prices in Sydney would fall by 3.8% over the three years, with units in Melbourne and Brisbane falling by 4.8% and 7.2% respectively.
However, house buyers are far better placed, with falls only predicted for Sydney and Darwin.
Ammunition for APRA
CANSTAR’s survey also looked at stretched borrowers, asking respondents how many months buffer they had in their mortgage.
Almost half (43%) had less than three months buffer in their mortgage. When it came to saving, 29% didn’t save any money and 26% saved less than 10% of after-tax income.
The results come in the same week that APRA signaled a renewed focus on borrowers with a low ‘net income surplus’. The prudential regulator is concerned that misuse of living expenses benchmarks is producing mortgage-holders who are vulnerable to shocks.
