Would-be buyers are increasingly turning to existing properties rather than new-builds, a new report suggests. QBE’s annual Barometer Report, released on Thursday, recorded that in the year to April, the number of commitments for purchase of new buildings had fallen 11.1%, a reverse of 2013 trends. Not only are buyers less interested in new dwellings, they’re less likely to put their money where their mouth is – the conversion rate from interest to purchase is less than 50%.
But before brokers rush out to remodel themselves as antique dealers, it’s worth noting the other points in QBE’s report. Perhaps conversely, the report also stated that the ‘outer suburb creep’ in capital cities is continuing, with 53% saying they are looking to buy in outer suburbs, compared to 48% last year. Furthermore, there was a drop in interest in central properties in Sydney, down by 9%, and in central Melbourne by 14%.
Falling interest in new builds may come down to more than changing fashions, however. First-time buyers in particular showed a sharply falling interest in new units and townhouses. The report suggests that this may because they are simply priced-out the market, or the current grant “is not great enough to generate interest in new properties.”
Carried out in June, the survey collected 1061 responses, of which 749 were from those who were intending to buy in the next five years, 712 were from those who currently had mortgages (400 qualified for both).
Collections: Mortgage News