A recent survey conducted by Savvy has revealed 91.6% of Australians agree that property prices are becoming “unaffordable” in the current market.
The survey polled 905 Australians about their attitudes and behaviours regarding housing affordability. 9.8% of those polled said they had purchased a property during the COVID-19 pandemic; 27.6% said they are considering buying within the next twelve months.
Almost a third of respondents (32.9%) are “very worried” that the current housing market is out of the reach of ordinary Australians. 39.3% said they “worried”, bringing the total of those concerned to almost three-quarters: 72.2%.
The main reason respondents cited for holding off on buying is that they are still saving for a deposit (33.2%) followed by general housing unaffordability (32.4%). 14.6% of respondents said they were waiting to ride out the COVID-19 pandemic.
This leaves many would-be home buyers in a double bind, as 28.6% say that they’re concerned if they don’t buy soon, they’ll be left behind.
When asked why property has become so out of reach, 26% cite foreign ownership as the reason, followed by record low interest rates (20.3%) and an oversaturated investment market (18.6%). 33.9% of people said that the end of JobKeeper/Seeker stimulus will force down prices, when asked if the measures had any impact on the real estate market.
Further, 29.8% said they were prepared to devote 20% of household income to home loan repayments; 25.7% said 30%; a staggering 20.6% said over 30%+.
Devoting over 30% of household income toward mortgage repayments is considered “mortgage stress” in the finance industry. 26.9% of those surveyed said they are currently experiencing mortgage stress.
Savvy Managing Director Bill Tsouvalas says that this should be cause for concern. “We’ve had a general feeling that the housing market is out of reach for Australians, but it seems that COVID-19 and other measures such as HomeBuilder and the First Home Buyer Deposit Scheme has still left most would-be home buyers worried if they don’t buy now, they’ll be shut out forever. The fact that almost a third of people are in mortgage stress is also alarming; it could be prelude to a much bigger crash.”
27% said they would save more of a deposit to secure their place in the property market; 23.7% said they’re waiting for a price crash. 21% are prepared to relocate in a regional or rural area.