Australians are still sitting on the fence when it comes to buying property but their savings are soaring and their mortgage stress is very low, a leading consumer sentiment survey has revealed.
According to the Commonwealth Bank/Mortgage & Finance Association of Australia Home Finance Index for September, the number of Australians planning to buy property in the next 12 months had fallen to 16.9 per cent, down from May (19.1%) and January (21.6%).
However, fear over global economies and debt, are matched by a number of positive factors as a quarter of home owners (25.8 per cent) are putting away more than 20 per cent of their take home earnings, up from 21.8 per cent in January 2011.
Mortgage stress is also down. In September 78.3 per cent of mortgages said they were easily making repayments, up significantly from the May Index (68.3%). Those struggling to meet repayments have decreased from 25.7 per cent in May to 17.5 per cent in September.
Chief executive of the Mortgage & Finance Association of Australia, Phil Naylor, said the September Home Finance Index showed while consumers were pulling back from buying property, they were also putting themselves in a position to act when confidence returned.
“With a recent interest rate cut, high savings and low mortgage stress, prospective home buyers are in a relatively good position,” he said. “Reticence about buying property seems linked to the perceived state of the economy, not to the personal financial state of consumers.”
Buyer reluctance is reflected in price expectations, with 46.4 per cent of the Home Finance Index respondents predicting lower house prices next quarter, more than double the 20.9 per cent nine months ago.
Commonwealth Bank’s executive general manager, mobile and third party banking, Kathy Cummings, said while home buyers were holding back, they were financially healthy.
“Consumers lack confidence, but high savings means they’re probably waiting for the right time to buy,” she said.
Consumers well positioned for house buying | MFAA