QUEENSLANDERS are more positive about housing affordability than anywhere else in Australia, with Generation Y the most upbeat of all when it comes to property prices, according to new research.
The annual realestate.com.au Housing Affordability Sentiment Index (HASI), which tracks the sentiments of Australians towards the cost of housing, reveals that all states and generations have a brighter outlook on property prices in general than 12 months ago.
This is despite statistics based on the RP Data-Rismark Daily Home Value Index showing capital city home values have all improved over the last year.
The HASI results were driven by an easing of household expenses and debt combined with increasing household savings.
The index also revealed that first-home buyers are returning to the market, making up 46 per cent of those looking to buy, compared with 28 per cent at the same time last year.
The HASI is based on a national survey of 2400 online panel members conducted by independent research company Research Ink on behalf of realestate.com.au.
In Queensland, 37 per cent of respondents believed their finances would improve (an increase of 6 per cent from 2012) and 28 per cent believed housing affordability would improve (up 7 per cent from 2012).
Generation Y (born 1981-1993) are the most positive about housing affordability in the country, driven largely by an optimistic outlook on their finances with 45 per cent expecting their financial position to improve over the next six month – significantly more than any other generation.
Fourteen per cent of the Generation Y’s surveyed reported they owned an investment property and home – an increase of 6 per cent on 2012 – and 24 per cent of those in the property market said the current economic conditions had increased their likelihood of buying or building.
Place Estate Agents Bulimba sales agent Shannon Harvey said she had seen a younger age group coming back to the market this year.
“They have been the most fragile with the volatility of the market previously, whereas the older buyers have seen it all before,” Ms Harvey said.
“Sentiment in definitely up.”
Narangba Gen Yer Jeremy Baker, 27, said he and his partner had opted for position over price when buying their first home earlier this year.
“We could’ve bought something more affordable but the location wasn’t desirable,” Mr Baker said.
He said the couple’s strong job security had been a key factor in purchasing, although low interest rates had also played a part.
Financial commentator and Finance Editor for research and ratings organisation CANSTAR, Justine Davies, said the research was flagging what buyer activity was expected to look like in the near future and the jump in first-home buyers looking to enter the market was encouraging.
“To me that indicates there is a real feeling now that home ownership is becoming more affordable, in part due to low interest rates that are boosting consumer sentiment,” Ms Davies said.
“As well as low interest rates though, there’s also the fact that Gen Y are getting older, with a greater proportion of Gen Y settling into their careers and, as the HASI found, feeling financially confident.
“That confidence is translating into a willingness to enter the property market.”
She said consumer confidence was vital to the property market for two reasons.
“One – from a buying point of view because it encourages potential buyers to get proactive: to visit their financial institution, work out their borrowing capacity and start actively looking,” Ms Davies said.
“Consumer confidence is also important in encouraging owners to list their property for sale. If there is no, or low, confidence some owners will delay listing, which reduces the available stock and therefore the flat market becomes a self-fulfilling prophecy!
“So I think consumer confidence creates more buyers, encourages for properties to be listed for sale and is therefore good for everyone.”
The latest housing finance figures from the Australian Bureau of Statistics shows first-home buyer finance commitments increased over the month of July, up 8.6 per cent to 7977.
National results from the HASI included:
• More than half of those in the market to buy or build were willing to sacrifice or reduce spend on recreational vehicles (66 per cent), luxury items (73 per cent), car upgrades (63 per cent), overseas holidays, clothing and entertainment to attain their dream
• Of those in the market to buy or build, 46 per cent (up 4 per cent) were willing to increase their current level of debt by more than 10 per cent to attain their dream
• A third or less were willing to sacrifice property features, with the exception of a pool
• 57 per cent (up 5 per cent) were willing to buy or build more than 10km outside of their ideal location
• 23 per cent would consider buying with a friend or family member
Original article published at www.news.com.au by Teela Jurgensen, The Courier Mail, 21/9/2013