Great Australian dream ‘alive and well’: Mortgage Choice

The majority of Australians believe that property is still a good investment despite current economic conditions, the aggregator’s survey has found.

The survey, commissioned by aggregator Mortgage Choice and conducted by Honeycomb Strategy, found that 83 per cent of Australians believe that property is still a sound investment in spite of rising interest rates, lack of housing supply and cost-of-living pressures.

The survey collected responses from 1,000 Australians and aimed to understand how the economic environment affected the attitudes and behaviours of Australians in regard to their home loans and property.

Peace of mind and financial security, control of a physical asset and good rental returns were among the top three reasons why respondents believed property remains a good investment.

Mortgage Choice chief executive Anthony Waldron said: “It’s a challenging time for many home owners and hopeful buyers, who have seen rising interest rates erode their borrowing capacity and faced a chronic lack of supply in the property market.”

“Despite our research revealing their understandable concern about entering the market, Australians still see the long-term value in property.”

Further findings revealed that two in three respondents felt that its “harder than ever” to find properties, with 44 per cent feeling that it’s not a good time for first home buyers (FHBs) to enter the market.

Moreover, prospective buyers were on the fence about entering the market this year, with 39 per cent of respondents feeling positive about entering the market and 40 per cent feeling negative.

However, 21 per cent of prospective buyers stated they felt both positive and negative feelings, which highlighted the “tightrope of hope and anxiety” that those trying to enter the property market are walking.

“The uncertainty we’re seeing from prospective buyers in the survey findings is completely understandable and highlights how critical it is to seek professional advice from a mortgage broker when you’re looking to buy property,” Mr Waldron said.

“It can be overwhelming navigating a market where interest rates have increased so rapidly.

“A broker can show you how your borrowing power will be affected by further changes to interest rates, help you understand whether fixing your loan may be a good option and, if you’re a first-time buyer, whether you might be eligible to access a grant or scheme.”

Although prospective buyers felt mixed feelings about the property market, those looking to sell their properties were more upbeat.

The survey found that over half of respondents who were actively selling their property were feeling optimistic about selling.

Additionally, sellers were more likely to think interest rates will drop by the end of 2023, despite market forecasts, with 32 per cent saying they think rates will fall compared to 19 per cent of all mortgagors surveyed.

Life decisions put on hold

Findings from this survey previously released by Mortgage Choice found that 76 per cent of mortgage holders, along with 78 per cent of prospective buyers, had postponed a “big life decision” due to economic headwinds.

According to the research, the most common life decisions that were postponed due to higher interest rates were saving money (50 per cent of mortgagors and 40 per cent of prospective buyers), buying a car (31 per cent and 21 per cent, respectively), and buying a new home or investment property (28 per cent and 42 per cent).

In addition, the survey revealed that 11 per cent of prospective property buyers postponed starting a family, while 19 per cent of respondents aged 55 and over have postponed retirement plans.

Mr Waldron said at the time that while these results were worrying, they were “unfortunately not surprising”.

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