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Buyers are more focused on borrowing amounts as they hunt for a home, guidance from brokers remains key.
The factors most important to homebuyers are changing as pandemic restrictions ease and the economy rebounds, a recent NAB survey of property professionals has found.
While the need for a work or study area was important in 2021, the amount homebuyers are prepared to borrow to buy a home is now the top factor, the national survey of 370 investors, real estate agents, and developers showed.
“The trade-off between affordability and lifestyle has changed markedly throughout the pandemic, with choices around CBD proximity, additional space and price fluctuating over the last two years,” NAB Executive, Broker Distribution, Phil Waugh said.
“Buyers are thinking hard about their future lifestyle preferences to ensure their short-term hunt for value is the right choice for the long term.”
Three out of four homebuyers surveyed nationally said the amount they were prepared to borrow was the most important factor in their purchase decision.
A buoyant property market
Home prices in Australia have been rising rapidly over the past few years. The CoreLogic Home Property Value Index aggregate for the five biggest capital cities was up 21.12 per cent year-on-year to the end of January 2022.
Looking at the broader property market, Mr Waugh said there were signs of price growth easing as supply levels improve.
“House prices are starting to ease in 2022 and already we have seen more supply come on to the market. Despite slowing price growth, our strong economy will support activity in the housing market,” he added.
NAB Group Economics is forecasting above-trend economic growth during 2022, supported by a pick-up in household consumption, increases in business and housing investment, and ongoing government spending. Strong economic growth is expected to continue into 2023.
Unemployment is expected to continue to fall over the next two years, with a tighter labour market expected to push wages higher, albeit gradually and from low levels.
“Inflation has increased and is tracking well above the Reverse Bank of Australia’s target band. After an unprecedented period of low interest rates, we are beginning to move into an environment in which interest rates will normalise,” Mr Waugh said.
Home factors that appeal
Nationally, just over half of people wanted to buy a house instead of an apartment, while the size of the land and the size of the house were critical factors for about half of respondents.
“We know that lockdowns have reshaped how we live with many people at home for longer periods,” Mr Waugh said.
“However, we are now seeing green shoots of people returning to inner-city suburbs, looking for the balance of lifestyle and value as cities like Melbourne and Sydney have opened up. This has been aided by more subdued price growth in these areas.”
In 2021, COVID-related work flexibility initially led to a big change in perceptions around buying in regional areas. This has started to reverse in 2022, with 26 per cent of respondents saying buying in a metropolitan area was important, compared with 21 per cent aiming to buying in a regional area.
Access to good local shopping, restaurants and amenities, were consistently important, with 62 per cent of survey respondents Australia-wide rating those factors highly.
Fast decisions and turnaround times
Mr Waugh said NAB remains positive about the long-term operating environment and the broader market opportunities for brokers and customers.
“Fast decisions are critical in reducing stress and supporting customers with getting their dream home, whether in the countryside or in the CBD.
“As the bank behind the broker and our market-leading white-label offering through Advantedge we want to be the most reliable bank for brokers and ensure consistent service across all channels, especially in a dynamic and fast-moving market.
“We are on track to deliver faster turnarounds which means getting more broker-introduced customers towards same-day unconditional approval, and ultimately unconditional approval within an hour,” Mr Waugh said.
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