Concerns about housing affordability and credit tightening topped Aussies’ list of worries about the market, according to ME’s new Quarterly Property Sentiment Report
Eighty-eight percent of respondents agreed that despite price falls in some areas, they still think housing affordability is a big issue in the country.
“People often forget house prices doubled in recent years, so falls of 10%-15% won’t do much to improve affordability over the long term,” said ME’s GM Home Loans Andrew Bartolo.
The survey also found that tighter credit policies were high on the list of worries, with 68% indicating concerns over the issue. A total of 62%, meanwhile, expressed worry about the value of their property falling.
“Concerns about credit may change given the recent APRA announcement on serviceability,” Bartolo said.
Concern over negative equity was high among investors, with 53% respondents confirming that they were worried. Similarly, investors were the most concerned about being forced to switch from interest-only to principle-and-interest home loans, with 74% of investors saying they were worried.
On the flip side of the coin, 59% said they were happy property prices are falling because it increases their chances of buying a property. The positive sentiment was more evident among first-home buyers, with 86% of them sharing the insight.
“Cooling property prices present new opportunities for those trying to get into the market,” said Bartolo. “If you’re planning to buy, it’s important to think long-term and always buy affordable. Consider whether you can comfortably repay your mortgage over the long term regardless of changes to interest rates, your lifestyle, and without having to rely on less dependable sources of income like rent and bonuses.”
Overall, the property sentiment is mixed. The report showed a polarised market with 35% positive about the property market, 37% neutral and 28% negative.
“Negativity was lower than might have been expected for a market that’s fallen dramatically in Australia’s key property markets over the last 12 months,” said ME bank.
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