New research has revealed around half of Australians are planning home ownership within the next year, but what they are looking for in a new home is shifting as a result of COVID-19.
“The CUA Home Sentiment Survey reveals a fifth of Australians think they are now in a better position to buy or invest in a property than pre-pandemic, especially those aged between 25 and 34,” explained CUA’s Chief Customer Officer Megan Keleher.
“This has led to a promising 46 per cent of Aussies thinking about buying a property in the next 12 months.”
Homes offering a dedicated office space or rooms large enough to accommodate work desks are becoming hot property, as over half of Australians think these are now more important considerations for their next home.
The traditional location factors such as being close to public transport or living near work are less important now for a fifth of people in this new COVID-19 impacted world (19 per cent and 23 per cent respectively).
An increased interest in home cooking could explain why two fifths think a large kitchen is more important now, and with remote working and learning a new-found reality for many, a fast internet connection was unsurprisingly a key consideration (68 per cent).
The ramifications of lockdowns led to nearly two thirds of Australians (64 per cent) nominating a reduced cost of living as a key factor when considering a new place to live, while one in 10 are thinking of moving further away from the city or closer to nature to live a quieter lifestyle.
A similar proportion are considering a move closer to family and nearly a fifth (17 per cent) are waiting to see what happens in the market.
These insights suggest a potential change in popularity of suburbs and property types in the months ahead, with the impact of COVID-19 continuing to shape the housing market, as Piers van Hamburg of Di Jones Real Estate in Sydney explained.
“COVID-19 threw everything into a state of flux when it hit our shores in early 2020 and it has made Australians rethink what is essential in the home moving forward,” Mr van Hamburg said.
“Our Southern Highlands team in regional NSW has seen an exponential increase in buyer demand for the area, as flexible working arrangements become the norm.”
Positive outlook for home ownership
The CUA Home Sentiment Survey revealed that more than half (53 per cent) of those considering a property purchase will be first home buyers, and 32 per cent are existing mortgage holders looking for a different home or an additional property.
For almost a fifth of first homebuyers (17 per cent), the research highlighted how government initiatives have enabled them to purchase a home before they thought they could or helped them purchase a bigger property than they thought was feasible.
“The government initiatives in place are clearly helping many people overcome some of the roadblocks to achieving this dream, so it was very pleasing to see the recent extension of the First Home Loan Deposit scheme to help an additional 10,000 first home buyers secure newly constructed homes,” Ms Keleher added.
Less promising however is that 32 per cent of people believe they are in a worse position now in terms of buying a property.
One in 10 say they had considered buying an investment property or their own property pre-pandemic but have since put plans on hold.
Refinancing more popular than ever
More than $53 billion worth of loans have been refinanced in the past six months in Australia according to Canstar, with CUA data showing a 23 per cent jump in refinancing applications since May 2020.
The research looked at the reasons behind this activity, revealing releasing equity to purchase a car or make another major purchase was the driving force for around a quarter of those refinancing.
One in five homeowners (18 per cent) said the equity released would fund renovations or extensions to their house.
“Refinancing can be one way to potentially save thousands of dollars over the term of your loan, and with interest rates at record lows it may be a good time to consider refinancing,” Ms Keleher said.
“However, it is a big financial decision and you need to consider more than just the interest rate. Fees and product features like redraw or offset facilities can make a big difference to the cost of your loan over time, so it’s important to do your research.”
