It seems that Australian property buyers are taking a break – there is certainly no rush to make a property purchase despite lower interest rates and lower property prices.
According to a survey of potential property buyers by the Commonwealth Bank/MFAA Home Finance Index for September, only 16.9% of respondents are considering purchasing a property over the next 12 months.
Families are continuing to save money and pay down debts, however property investment in not the strategy for most. More than a quarter of respondents said they were saving more than 20% of their take home earnings. The result was up from 21.8% who said they were saving in January.
Mortgage stress is certainly down. In September, even before the RBA rate cut, 78.3% of the survey’s respondents said they were comfortable with their levels of debt and were easily meeting home loan repayments. The result was up from 68.3% in May.
It is clear that when the property market turns around there will be many people who will be able to afford to make a purchase and qualify for a home loan.
“With a recent interest rate cut, high savings and reduced mortgage stress, prospective home buyers are in a relatively good position. Reticence about buying property seems linked to the perceived state of the economy, not to the personal financial state of consumers,” he said.
Almost half the people surveyed believe that property prices will fall further over the next few months.