Around half of Australians are planning a home purchase within the next year, but what they are looking for in a new home is shifting as a result of COVID-19, according to research from Credit Union Australia (CUA).
“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 they were pre-pandemic, especially those aged between 25 and 34,” CUA Chief Customer Officer Megan Keleher said of the survey results covering 1500 Australian respondents.
“This has led to a promising 46 per cent of Aussies thinking about buying a property in the next 12 months.”
Amongst those considering a property purchase, the survey revealed a shift in priorities towards a desire for a dedicated office space or rooms large enough to accommodate work, with more than half of the respondents identifying the feature as important for their next home.
With remote working and learning a new-found reality for many, a fast internet connection was also a key consideration (68 per cent).
Ray White City Residential Perth Sales Executive and Auctioneer Natalie Hatton said many buyers were looking for space to enjoy.
“Outdoor space has become a big one, and people really want land,” she said. “I have a two-hectare property in Banjup where we had 66 people through over four weeks and four offers.
“I have found a shift in that people don’t want to be locked up if we happen to go into lockdown again.”
More traditional location factors, such as being close to public transport or living near work, were less important for a fifth of people (19 per cent and 23 per cent respectively), according to the report, while an increased interest in home cooking might explain why two-fifths thought a large kitchen was more important now.
The ramifications of Australia’s various lockdown periods led to nearly two-thirds of respondents (64 per cent) nominating a reduced cost of living as a key factor when considering a new place to live, while one in 10 were thinking of moving further away from the city or closer to nature to live a quieter lifestyle.
A similar proportion were considering a move closer to family and nearly a fifth (17 per cent) were waiting to see what happened in the market.
Realmark Urban Sales Representative Adam Ghizzo said while buyer priorities might have changed in light of COVID-19, the tight and competitive market meant being picky might mean you missed out.
“If you hesitate, someone else will buy it,” he said. “You need to put in an offer.
“People are not being as picky at the moment, they are now taking an unrenovated bathroom or a smaller study area because they are realising they just need to get into something.”
Positive outlook for homeownership
The CUA Home Sentiment Survey revealed more than half (53 per cent) of those considering a property purchase would be first homebuyers, and 32 per cent were 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 had 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 homebuyers secure newly constructed homes,” Ms Keleher said.
Less promising, however, was that 32 per cent of people believed they were in a worse position now in terms of buying a property. One in 10 said 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.”