Homebuyer confidence rises to post-GFC high

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Even though fewer Aussies believe it’s a good time to buy property, that hasn’t stopped national homebuyer confidence rising up.   

The Genworth Homebuyer Confidence Index (HCI) has increased for the third consecutive period since March of last year. The index rose from 99.2 in March to 99.6 in September 2015.

Increases in the HCI were influenced by the decrease in the number of respondents who used more than 50% of their income to service debt - down from March’s 29% to 23% in September.

This period also saw the cash rate drop to 2% which greatly helped homeowners struggling with their mortgage repayments.

 “Whilst the HCI has reached a post-GFC high, those that believe it is a good time to buy a home has fallen to 48%, from 52% six months ago. This was mirrored by those that thought it was a good time to invest in property which also fell from 47% to 44% in the same period,” said Bridget Sakr, Genworth’s Chief Commercial Officer.

The report also states that 86% of the respondents expect property prices to increase or remain stable in the next year.

Meanwhile, first homebuyer (FHB) confidence dropped from 102.1 last March to 98.4 in September thanks to the higher proportion of FHB’s experiencing mortgage stress—a considerable 21%, 9% up from March.

The results also found that FHB’s were more likely to use other sources than their own savings to make a deposit—a growing trend.

Further, Sydney’s rising house prices may have had a hand in affecting buyer confidence in NSW, with those who believe it is a bad time to buy property at 25%, compared to the national average of 18%.

The research, however, shows that personal views on property prices have a small impact on timing and that it’s actually interest rates and an individual’s personal circumstances which are more likely to convince a buyer that it’s a good time to purchase.

The survey also shows that the ability to enter the property market (as opposed to the ability to meet mortgage repayments) is the key challenge for those hoping to buy a property.

“Two in five prospective first homebuyers indicated that high property prices are the greatest barrier to home ownership, while one in five suggested the barrier is saving for a deposit. This is consistent with March’s Streets Ahead findings and shows no improvement,” said Sakr.


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