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A fifth of Aussies in a better position to buy a house thanks to COVID-19

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New research reveals 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,” explains 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, an agent at Di Jones Real Estate in Sydney explains.

“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,” says Mr van Hamburg. “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,” added Ms Keleher.  “CUA is proud to have already helped hundreds of Australians into home ownership as part of this scheme, as well as continuing to assist eligible homebuyers with their deposits through the BuyAssist shared equity program.”

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. 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,” advised Ms Keleher.

About the CUA Home Sentiment Survey

The research by Pollfish was conducted in late September 2020, surveying 1,500 Australian consumers aged 18 and over.

Additional findings

  • First home buyers:
    • 66% of those surveyed aged 25-34 said they were first homebuyers
    • 26% of those surveyed aged 45-54 said they were first homebuyers
  • When thinking about new homes and what is now regarded as important factors the following are more important now:
    • Separate office space - 51% (63% of those surveyed with children)
    • Garden/outdoor space - 59% (70% of those surveyed with children)
    • Rooms that can accommodate work desks - 56% (63% of those surveyed with children)
    • Fast internet connection - 68%
    • Somewhere that reduces cost of living (64%)
    • Located near family (49%)
    • Indoor space for children to play - 44% (56% of those surveyed with children)
    • Large kitchen (40%)
    • Entertainment space (43%)
    • Located near public spaces (43%)
    • Off-street parking (34%)
    • Suitable for a pet (37%)
    • Located near community services (35%)
    • Located close to work (35%)
    • Located near public transport (35%)
  • Those who believe they are in a better position than before to buy/invest in a property:
    • 20% of 18-24 year-olds
    • 27% of 25-34 year-olds
    • 24% of 35-44 year-olds
    • 16% of 45-54 year-olds
    • 33% of first homebuyers
  • Those who believe they are in a worse position than before to buy/invest in a property:
    • 44% of 18-24 year-olds
    • 30% of 25-34 year-olds
    • 32% of 35-44 year-olds
    • 30% of 45-54 year-olds
    • 30% of first homebuyers
    • 40% of those living in Victoria
  • A third of people (34%) think it’s a good time to buy before the market picks up again and while interest rates are low (32%).
  • Savings as a result of COVID-19:
    • 1 in 10 people have less savings now as a result of COVID-19
    • 14% said they have more savings now but only half of these are putting this extra cash away for a deposit on a home
  • 1 in 10 Australians weren’t aware of any government initiatives to help with home ownership and a fifth of people said they aren’t eligible for government initiatives
  • Of those considering refinancing their home in the next 6 months or those who have done so already:
    • 14% said they wanted to release equity to invest, for instance in shares
    • 26% said it was to find a better interest rate (26%)
    • A fifth of people (21%) said an Australian based call centre was a big consideration for them when refinancing, while longer loan terms, lower interest rates, fewer fees and charges and overall reducing repayments were the main considerations.
  • Melbourne continued a longstanding trend of being rated the most liveable city with 29% of the votes, followed by Sydney (20%) and Brisbane (16%).