Australians are feeling more confident about their home buying plans, according to new Westpac research.
The latest Westpac Home Ownership Report has found 44 per cent of Australians plan to buy a new home in the next five years – increasing 9 per cent since July 20231.
Additionally, increases have also been recorded in those planning to buy an investment (+6%), those planning to upsize (+4%) and those planning to renovate (+4%)2.
For first home buyers however, the research uncovered a different story, recording a 3 per cent decrease in Australians planning to achieve home ownership in the next five years with 86 per cent admitting recent cost-of-living pressures have delayed their home buying plans.
To combat affordability challenges, aspiring homeowners are getting creative and becoming more open to compromises to break into the market. More than half (56%) are planning to buy with their partner (+16%), three quarters (75%) are willing to buy somewhere they weren’t previously considering (+9%) and half (50%) are considering ‘rent-vesting’ to achieve home ownership3.
Almost half (47%) of Australians also said they were willing to pay for Lenders Mortgage Insurance (LMI) to get into their first home sooner, with two thirds (65%) cutting back on expenses like food delivery to help save for a deposit.
Westpac Managing Director of Mortgages Damien MacRae says Aussies are sharpening their focus on long-term goals.
“While some buyers have paused their housing plans, the intention to buy remains strong and prospective buyers are becoming more ruthless with their goals,” Mr MacRae said.
“They understand it’s a big task, but they are determined to break into the market and are willing to compromise to get there.
“Buyers are casting their expectations wider, willing to compromise on location and are forgoing everyday luxuries like food delivery. They are also more inclined to relocate and move to apartment living.”
The research further uncovered that while a house is still the preferred property this has decreased by 5 percentage points since 2021, while apartments and units have jumped up by 7 per cent. Additionally, preferences for a townhouse have doubled and house and land package preferences have quadrupled4.
“During the pandemic we saw more buyers seeking property further from the city in pursuit of more space, however it appears buyers are willing to concede on location in order to get a foot in the door,” Mr MacRae added.
“While it’s promising to see buyer confidence returning with growth in medium to long-term plans, this underscores the importance of addressing the challenge around supply shortages. We welcome Federal and State Government initiatives which seek to address this, and now need businesses and government at all levels to progress with implementing these policies at pace.”
Westpac has recorded an increase in customers using its budgeting tools and resources as more seek to get on top of their finances and plan for the future. Additionally, home-related goals were the second most popular savings categories created by customers in 2023.
