Confidence in the Australian housing market has bounced back in the third quarter as the RBA slows the pace of rate rises.
The number of Australians who say now is a good time to buy rebounded to 23%, after dipping to a survey low of 18% in Q2. The figure is only marginally below where it was a year ago and follows six straight quarterly declines.
NAB Group Executive – Personal Banking, Rachel Slade, said spring had brought green shoots to the housing market.
“The housing market, like the broader economy, is proving resilient in 2022,” Ms Slade said.
“The first rate rises in more than a decade have caused concern, but signs the pace of rate rises are easing has generated a rebound in confidence through the crucial spring selling season.
“Surging rental prices are also a factor, both encouraging investors back into the market as well as first home buyers looking to escape rising rents.
“While we expect prices have further to fall, there are reasons for more optimism than a couple of months ago.”
The research also finds renovating is becoming more of a challenge, with 60% of Australians in the survey undertaking a renovation noting costs were rising.
The number of Australians who think now is a good time to renovate dropped to a new survey low of 21% in the third quarter, with the one in five figure well short of the one in three recorded in the March quarter.
“Inflation and the labour shortage continue to have an impact on home building and renovations,” Ms Slade said.
“Most Australians aren’t confident they will be able to renovate in a timely, cost-efficient way, although there is hope price hikes will start to moderate into 2023.
“Unsurprisingly, it is typically houses that need a bit of love that are struggling to find buyers at the moment, while houses that are move-in ready are often finding strong demand, particularly given the relative lack of supply.
“We are focused on giving buyers the confidence and support to buy their dream home with fast approvals, while making sure existing homeowners know their options and have help available for anyone worried about rising rates.”
- Confidence in buying a home has lifted across most states – highest in Victoria (27%), followed by WA & NSW (25%). The ACT bucked the trend having recorded the strongest level of buyer confidence in Q2 (27%), easing back to around 1 in 5 buyers in Q3 (20%). SA came in next (19%), followed by Queensland (19%) with confidence to buy weakest in Tasmania (18%).
- When asked about buying investment property, the number of Australians who thought it was a good time held steady at 21%. The increase was sharpest in NSW (to 24%), followed by WA (21%), VIC (20%) and QLD & SA (18%). Conversely, sentiment fell sharply in the ACT and TAS to just 10%.