Easing house price growth appears to be encouraging one in four prospective homebuyers to take the plunge.
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.
NAB executive for homeownership Andy Kerr said this slowing trend in price growth and the expected growth in housing supply over the year would likely serve as a driver of buying 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 now really the time to buy?
McGrath Estate Agents executive director John McGrath said the decision to buy should always depend on personal needs and affordability, no matter where prices are currently moving.
“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.
For Mr McGrath, it is crucial for buyers to look at a house as a home first and foremost, and a financial asset second.
“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.
Interestingly, the NAB research showed that for some states, the intentions of Australians to buy a property are higher compared to their intentions of buying a home.
For instance, around 24% of Australians in New South Wales think now is the best time to invest, versus 22% who said conditions are ripe for a new home.
The biggest gap is in the ACT, where 30% of Australians believe investing is right under current conditions, compared to 17% who said the same about buying a home.
Renovation intentions still high despite cost concerns
The NAB report also shed light on Australians’ intentions to renovate or upgrade their homes.
Despite inflation starting to have an impact on renovation plans, around one in three Australians still believe now is a good time to renovate their homes.
Around half of Australians who are already renovating think it is harder to complete their projects, indicating higher costs.
Overall, 15% of Australians are expected to renovate their properties over the next 12 months. The highest share of Australian homeowners with plans to renovate is in the ACT 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.”
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