Australians are jeopardising their chances of entering the property market due to a poor understanding of their borrowing power and market conditions.
According to a recent survey by the Commonwealth Bank, a large proportion of Australians don’t understand what impacts their ability to get a mortgage and are also likely to overestimate property prices.
The survey results show that 45% of respondents don’t understand how factors such as credit card limits, monthly living expenses, annual income and savings can impact on them trying to access finance.
In terms of overvaluing properties, 57% of Sydney respondents overestimating the median dwelling price, followed by 49% in Brisbane and 47% in Adelaide.
Dan Huggins, Commonwealth Bank executive general manager of home buying, said the survey results showed that while property discussions maybe a common occurrence in Australia, misperceptions are rife among potential buyers.
“Discussing the local property market is a national pastime but these results show that, even for those actively looking to buy a property, perception can be different to reality. Home buyers need to do their research so they can enter the market with confidence,” Huggins said.
"Our research found more than half of respondents didn’t feel confident they could find current property market price estimates or what their potential repayments could be, which are important things to know when looking for a property,” he said.
Huggins said those misconceptions were behind the Commonwealth Bank’s decision to be latest to launch a property research app.
“We know people use a variety of resources to inform their purchasing decisions such as websites, real estate agents and their friends and family. The CommBank Property app provides all the information and insights in one place, anytime, anywhere,” he said.
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