While most Australians still see property as a good investment, many now find it difficult to locate suitable properties and believe it’s a bad time for first home buyers to enter the market, according to recent research.
According to one mortgage broker, these findings highlight the chance for brokers to add value and help uphold the Australian dream of homeownership, even in today’s challenging property landscape.
“A good mortgage broker will provide their clients with a suitable loan for their situation; a great broker will help them navigate the world of property ownership by providing referrals to other essential professionals to give a holistic service offering,” said Kyle Thompson (pictured above left), owner of Mortgage Choice Campbelltown.
“Whilst a mortgage broker can't provide advice on property selection they should have on hand a buyer’s agent or a real estate agent connection to help secure the perfect property for their clients.”
The survey of 1,000 Australians, carried out by Honeycomb Strategy on behalf of Mortgage Choice sought to understand how the current economic environment is affecting Australians' attitudes and behaviour towards property and their home loans.
It revealed that two in three respondents feel it’s “harder than ever” to find properties, with 44% of all survey respondents feeling it's a “bad time” for first homebuyers to buy property.
Many other had even delayed making big life decisions because of the economic climate.
The sentiment from survey respondents echoed data from the Australian Bureau of Statistics, which showed a fall in both investor (-7.2%) and owner-occupier (-17.5%) new loan commitments in July compared to the previous year.
And with nearly 1.5 million borrowers at risk of mortgage stress, it’s easy to assume that homeowners are in an unenviable position.
Despite all this, the survey still showed that most Australians still believe property will provide financial security and strong investment returns.
The top three reasons 83% of Australians believed property still made a good investment were:
With the median dwelling value growing from $114,000 to over $700,000 between 1992 and 2022, it’s easy to understand their logic.
Australia’s housing market is the cornerstone of the economy, worth $10 trillion – more than superannuation, listed stocks, and commercial real estate combined.
Despite the current obstacles, generations of Australians continue to believe in the power of property.
Mortgage Choice CEO Anthony Waldron (pictured above right) acknowledged it was a challenging time for many homeowners and hopeful buyers, who had seen rising interest rates erode their borrowing capacity and faced a chronic lack of supply in the property market.
“Despite our research revealing their understandable concern about entering the market, Australians still see the long-term value in property,” Waldron said.
The prospective buyers surveyed were split in their feelings about entering the market this year, with 39% of prospective buyers feeling positive about entering the market and 40% feeling negative.
Interestingly, 21% of prospective buyers said they had both positive and negative feelings, highlighting the tightrope of hope and anxiety those trying to enter the property market are currently walking.
Only 38% of prospective buyers said they were keen to purchase an investment property.
Prospective buyers that felt most anxious and overwhelmed about entering the property market were generally younger and on lower incomes, while those feeling most hopeful already owned property.
“The uncertainty we're seeing from prospective buyers in the survey findings is completely understandable and highlights how critical it is to seek professional advice from a mortgage broker when you're looking to buy property,” said Waldron.
With interest rates nearing their peak, Thompson urges brokers to draw on their relationships, experience, and educational learnings to help provide clients with a holistic solution.
"As brokers, we know how daunting it is to buy a first home, especially now,” Thompson said.
“That's why – at least at Mortgage Choice - it's critical we have access to many lenders and products, can assess borrowing capacity quickly, and have resources to teach homebuyers.
“But the ability to communicate with clients proactively, understand government grants and incentives, and be patient and understanding should be universal for all brokers in our industry."
Get the hottest and freshest mortgage news delivered right into your inbox. Subscribe now to our FREE daily newsletter.
