As the housing prices continue to rise, consumers don’t believe that now is a good time to buy property, according to new research by Finder, Australia’s most visited comparison site.
Finder’s Consumer Sentiment Tracker (CST) is the largest chronological consumer survey in Australia, with 30,230 respondents over the course of the past 2.5 years.
Each quarter, Finder analyses its most recent data to uncover the trends underpinning the financial, mental and physical health of Australian households.
In this report, we break down the most interesting results – and ask a select sample of 12 leading economists from Finder’s RBA Cash Rate Survey to weigh in on the results.
Sentiment towards buying property hits a new low
Finder’s Property Positivity Index shows that the number of Australians who think now is a good time to buy property hit its lowest level on record in October 2021.
The index continued its downward trend after hitting its peak in December 2020, where 67% of Australians felt it was a good time to buy property.
Brand new data from October 2021, shows just over a third (35%) of Australians believe now is the time to buy after a small increase to 40% in September.
Graham Cooke, head of consumer research at Finder, said property price growth was seemingly unstoppable.
“Extended lockdowns and border closures have done little to curb price growth this year.
“Rock-bottom interest rates and the property boom instilled a fear of missing out among prospective home buyers.
“As we emerge from those lockdowns, a record number of Australians are now pessimistic that now is the time to buy,” Cooke said.
Data from CoreLogic shows house prices are showing no signs of declining, with year-on-year price increases of between 14% and 31% in Australia’s capital cities. The median house in Sydney now costs $1.2 million.
Dale Gillham of Wealth Within said it was always a good time to buy property, but that there are better times than others.
“Low interest rates make the ROI in borrowing to get into property very attractive right now.”
However Shane Oliver of AMP Capital disagreed, noting now was not the time to buy.
“A year ago when prices were still down was a good time to buy, but since then affordability has deteriorated.”
Australians feel negative towards affordability
There has been a notable increase in the number of Australians who feel extremely negative about their ability to afford a home in the future.
In June, the index hit a high of 22%, surpassing its previous high of 17% in April 2020. Since then the index has not dropped below 19%.
Out of 12 leading economists, 83% (10) believe that governments and authorities have a responsibility to address property affordability issues.
Aussie savings in decline
The average amount of money Australians save each month has fallen to its lowest level since before the pandemic.
After a temporary uptick through July and August, average monthly savings hit $688 in September, the lowest level since March 2020.
Cooke said the dip was likely due to the threat of the pandemic slowly starting to pass.
“Once Australians begin to receive more certainty about the future, and with restrictions lifting across parts of the country, we can expect spending to start rising again.
“The Christmas months traditionally see an uptick in consumption. If Australians are free to travel and socialise for the first time in months this summer, we can expect spending to surge as people make the most of their freedom,” he said.
Experts & Economists surveyed:
- Dale Gillham, Wealth Within
- David Robertson, Bendigo and Adelaide Bank
- Tony Makin, Griffith University
- Michael Yardney, Metropole Property Strategists
- Nicholas Gruen, Lateral Economics
- Leanne Pilkington, Laing+Simmons
- Rich Harvey, Propertybuyer
- Shane Oliver, AMP Capital
- Sean Langcake, BIS Oxford Economics
- Saul Eslake, Corinna Economic Advisory Pty Ltd
- Cameron Kusher, REA Group
- Christine Williams, Smarter Property Investing Pty Ltd
- Julia Newbould, Money magazine