The share of people who feel it's a good time to buy a home falls for the fourth straight quarter
Less than a quarter of Australians believe now is a good time to buy a home, the share falling amid projections that prices will flatten later this year, according to new data from National Australia Bank.
The number of people who thought it was a good time to buy a home fell for the fourth straight quarter to 24% – a significant drop from the 45% share at this time last year, according to a report by The Australian.
Only 33% believe now is a good time to renovate as inflation continues to climb, NAB’s Behavioural Insight Report said.
Despite predictions that price growth will slow, the share of Australians intending to buy a home in the next 12 months remained unchanged at 13% in the fourth quarter. The number of people intending to buy an investment property in the next 12 months also held steady at 9%.
Despite COVID-related impacts last year and this year, the housing market remained strong thanks to low rates, and saw only brief disruptions to construction, The Australian reported.
Dwelling prices rose strongly, ending last year about 21% higher than they started, according to data from CoreLogic. However, NAB predicted that prices would flatten later this year, a trend it expects to continue through 2023 as prices see downward pressure from rising mortgage rates.
“We currently expect more subdued property price growth in 2022, with gains of around 3%, compared to 21% in 2021,” NAB homeownership executive Andy Kerr told The Australian.
NAB predicted that prices will drop 10% at the end of 2023. Drops were predicted across all capital cities, with Sydney and Melbourne tipped for the largest falls.
However, the bank predicted that the labour market would remain strong, with wages growth accelerating and interest rates remaining relatively low.
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NAB moved up its rate-hike prediction, with the first Reserve Bank rate rise predicted for August and further hikes in September and November, The Australian reported.
With rate rises looming, only 28% of Australians believed now was a good time to get a mortgage, NAB reported.
Increasing costs have also made it harder to save for renovations, the bank found. About 50% of Australians renovating their home said it was harder to complete the renovation in the last three months, and 60% said it had become more expensive.
Despite rising costs, 18% intended to upgrade their existing home, and 15% planned to renovate a property within the next 12 months, The Australian reported.
“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,” Kerr said. He said that people considering renovations should save a buffer for unexpected costs.
