realestateVIeW.com.au housIng sentIment reportmarch 2014

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• Commissioned by realestateVIEW.com.au in March 2014, a survey was conducted with 1,216 Australians via an online questionnaire. Of the respondents that specified locations, the breakdown of locations were as follows: VIC (66%), NSW (19%), QLD (4%), SA (3%), WA (4%), TAS (3.5%) and NT (0.5%).

• The survey asked buyers currently in the market for property to respond anonymously to 25 questions, with another 18 questions answered by current renters and those searching for a rental property. The survey sought to obtain a comparative overview of current sentiment on the housing market including pet peeves, lifestyle preferences (where people are looking to buy or rent, what type of properties and suburb features they’re looking for) and affordability concerns (the biggest concerns, what they can afford, the tactics they’re using to save and invest in property).

• The report also includes quantitative data from realestateVIEW.com.au and propertyDATA.com.au such as most searched suburbs, median house prices, auction clearance rates and days on market.

aBout the housIngsentIment report

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renter sentIment

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DemographIcsoF renters

KeY

renting alone (singles and single parents)

renting as part of a share house

renting with a partner (including two-parent families)

at home with parents looking to rent alone

renting with a friend

at home with parents looking to rent with a partner

12.2%

10.8%27.6%

37.8%

5.2%3.8%

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32.7%

6.7%

6.3%

29.9%

9.8%

14.6%

<1 year

3 – <4 years

1 – <2 years

4 – <5 years

2 – <3 years

5+ years

KeY

length oF tIme renters haVe Been In the rental marKet

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reasons For rentIng WIthout Intent to BuY

49.8% can’t afford a deposit

32.5% don’t believe they can afford mortgage payments

28.7% can’t afford to buy in the area they want to live in

25.7% think the market is overpriced

22.5% think it’s cheaper to rent

18.9% have difficulty obtaining finance

16.5% don’t want to be tied to one place because of a mortgage

12.1% have already bought an investment property.

of those who bought an investment property, the reasons they are renting:

> 44.4% say it’s because they make more money this way (i.e. rental income covers all / most of their mortgage payments, negative gearing benefits etc)

> 38.8% say it’s because they can’t afford to buy in the area they want to live in

> 11.1% say it’s because they don’t want to be tied down to a mortgage

> 11.1% say it’s because they like investing in growth areas / hot spots outside of their local area / city / state.

I can’t afford a deposit

I can’t afford mortgage payments

I think the market is overpriced

It’s cheaper to rent

Difficulty obtaining finance

I don’t want to be tied down to one place

because of a mortgage

I can’t afford to buy in the area I want to live in

I have already bought an investment property

49.8%

32.5%

18.9%

25.7%

16.5%

22.5%

28.7%

12.1%

0 10% 20% 30% 40% 50%

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the pet peeVes oF renters

60% of renters cite not being able to make changes to the property (e.g. putting nails in the wall, installing a TV wall mount, extra phone line / Foxtel, etc) as a major pet peeve.

They’re also annoyed by property managers who aren’t responsive to issues (44%), pet rules / restrictions (38%), paying to fix things themselves because it’s quicker (30%) and last minute inspections (23%).

not being able to make changes to the property

property manager unresponsive to issues

last minute inspections

pet rules / restrictions

paying to fix things myself because it’s quicker

lack of flexibility in the contract

other

0 10% 20% 30% 40% 50% 60%

59.7%

44.1%

37.8%

30.3%

22.7%

14.7%

14.3%

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BIggest hurDles For rentIng propertY

competition

getting to opens / inconvenient

open times

Income test

long-winded application process

reference checks

0 10% 20% 30% 40% 50% 60%

58.5%

55.9%

34.9%

17%

16.6%

The top 3 difficulties for finding a rental property are competition (58.5%) cited this as a barrier, getting to opens / inconvenient open times (55.9%) and long-winded application processes (34.9%).

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most searcheD suBurBs to rent (past sIx months)

the top 20 most searched suburbs to rent in Victoria over the last six months were predominantly inner-city and affluent mid-suburban areas including richmond, south Yarra and hawthorn.

“ The great Australian dream of home ownership is fading for a significant percentage of the population either because they feel unable to obtain and manage a mortgage, or because it’s too expensive to buy into the area they rent in.”

petra sprekos – general manager, realestateVIeW.com.au

suBurB 2013 meDIan rent (2-BeD unIt)

2013 meDIan rent (3-BeD house)

st Kilda 3182 $450 $668

richmond 3121 $500 $700

south Yarra 3141 $490 $800

Brunswick 3056 $399 $583

prahran 3181 $428 $680

elwood 3184 $410 $753

carlton 3053 $466 $680

hawthorn 3122 $395 $677

Fitzroy 3065 $560 $740

northcote 3070 $420 $600

north melbourne 3051 $452 $650

south melbourne 3205 $510 $753

Brighton 3186 $480 $799

st Kilda east 3183 $385 $602

port melbourne 3207 $570 $836

shepparton 3630 $210 $270

Fitzroy north 3068 $450 $682

preston 3072 $353 $421

malvern 3144 $385 $735

Source: REIV data March 2014

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Distance from city centre (21% ranked this as always important)

Being in a school zone (17.5% ranked this as always important)

parks and communal spaces (15.9% ranked this as always important)

number of neighbours (13.9% ranked this as always important)

cafes and restaurants (10% ranked this as always important)

safety is by far the most important consideration for renters (53.9% ranked this as always important), followed by public transport access (44.2% ranked this as always important). Interestingly, cafes and restaurants were last on the list (10% ranked this as always important).

how safe you feel in the neighbourhood (53.9% ranked this as always important)

public transport access (44.2% ranked this as always important)

shops (34.7% ranked this as always important)

Distance from work (34% ranked this as always important)

close to family / friends (21.7% ranked this as always important)

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2 7

3 8

49

510

Factors InFluencIng a renter’s DecIsIon to lIVe In a suBurB

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has the masterchef phenomenon permeated our housing tastes? 26.5% of renters rank a big or good quality kitchen as a necessity when looking to rent, and one fifth of buyers (19.8%) see a big kitchen as an important feature.Taking a closer look, buyers and renters look for different things when it comes to property:

BuYers

Big or good quality kitchen (19.8%)

garage / car space (18.2%)

appropriate size of property (15.8%)

second toilet (15.6%)

good floor plan (14%)

air con / heating (13.8%)

second bathroom (13.5%)

outdoor area (13.3%)

storage (9.1%)

separate laundry (8.3%)

1

6

2

7

3

8

4

9

5

10

renters

appropriate size of property (27.4%)

Big or good quality kitchen (26.5%)

air con / heating (26.1%)

garage / car space (19.7%)

outdoor area (19.1%)

good floor plan (13.2%)

separate laundry (12.8%)

age (11.7%)

storage (11.2%)

second bathroom (10.8%)

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6

2

7

3

8

4

9

5

10

top 10 most sought aFter propertY Features – renters Vs BuYers

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BuYer sentIment

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most searcheD suBurBs to BuY (past sIx months)

suBurB 2013 DaYs on marKet 2013 auctIon clearance rate

2013 meDIan house prIce

south Yarra 3141 32 79% $1,370,000

hawthorn 3122 31 80% $1,562,500

richmond 3121 27 80% $877,000

Brighton 3186 42 67% $1,793,000

Kew 3101 43 74% $1,585,000

malvern 3144 41 71% $1,520,000

camberwell 3124 37 83% $1,452,500

prahran 3181 27 82% $980,000

elwood 3184 36 65% $1,300,000

st Kilda 3182 36 66% $918,500

glen Iris 3146 38 79% $1,332,500

northcote 3070 37 80% $875,000

Brunswick 3056 37 81% $769,000

Ballarat 3350 24 18% $295,000

malvern east 3145 43 78% $1,160,000

hawthorn east 3123 36 81% $1,490,000

armadale 3143 50 82% $1,550,000

hampton 3188 44 66% $1,265,000

Source: REIV data March 2014

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nsW

second toilet 21.1%

Big or good quality kitchen 18.4%

second bathroom 17.1%

garage / car space 17.1%

appropriate size of property 15.8%

good floor plan 11.9%

outdoor area 11.8%

storage 9.2%

air con / heating 7.9%

separate laundry 7.9%

VIc

Big or good quality kitchen 20.7%

garage / car space 18.9%

appropriate size of property 16.2%

second toilet 15.1%

good floor plan 15.9%

air con / heating 15.1%

outdoor area 14%

second bathroom 12.5%

storage 9.4%

separate laundry 8.3%

1 1

6 6

22

7 7

3 3

8 8

44

9 9

55

10 10

top 10 most sought aFter propertY Features – VIc Vs nsW home BuYers

Buyers in australia’s two most populated states want different things from a home. more Victorians prioritise a large or good quality kitchen (20.7%) whereas nsW buyers think a home with a second toilet is more important (21.1%).

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greatest hurDles to purchasIng a propertY

% ranKIng “DIFFIcult” or “VerY DIFFIcult”

greatest hurDles to purchasIng a propertY natIonal VIc nsW

rising property prices 49% 44.5% 48.6%

Being priced out of the market/outbid by other parties

48% 43.8% 41.7%

selling my home – I can't get the price I want 46% 43.8% 41.7%

changes to first home owner grant 41% 43.8% 41.7%

stamp duty costs 40.9% 35.6% 44.7%

Worrying about the state of the market 33% 30% 36%

saving for a deposit 32% 25.4% 41.9%

Job security 28% 22.9% 28.4%

obtaining finance 21% 16.9% 25.7%

majority of respondents list rising property prices (49%) and being priced out of the market (48%) as the greatest barrier to buying a property.Interestingly, Victorians aren’t as worried about job losses despite having the highest unemployment rate – only a quarter of Victorians are troubled compared to the national statistic of 28%.

Obtaining finance is also less of a worry for Victorians (17%) than NSW (26%). In contrast 21% of buyers nationally list obtaining finance as a hurdle to buying.

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length oF tIme BuYers haVe Been looKIng to purchase natIonal VIc nsW

In the market for the last three months 52% 48% 48%

In the market for the last 3-6 months 21% 24.5% 18.4%

In the market for the last 7-12 months 9.5% 12.1% 11.8%

In the market for 1-2 years 6.6% 8.7% 11.8%

In the market for 2-3 years 2.5% 1.9% 2.6%

In the market for 3+ years 8.4% 4.2% 15.8%

nationally, the majority of buyers (73%) have entered the market in the last six months (52% in the last three months, 21% in the last 3-6 months) – confirming a resurgence in buyer confidence despite concerns over affordability.This is higher for first-home buyers at 78.2% (54.6% in the last three months, 23.6% in the last 3-6 months) – showing first home buyers are returning to the market, contrary to recent findings from home loans data.

length oF tIme BuYers haVe Been looKIng to purchase

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many buyers are relying on the bank of mum and Dad to enter the property market, nearly one fifth (19.4%) rely on their parents either through borrowing money, living with them or using them as a parental guarantor. Victorians are more reliant on mum and Dad (23.7%) than their nsW counterparts (15.8%). First home buyers rely heavily on their parents to enter the market; in fact, nearly half (42.6%) rely on their Mum and Dad.

popular saVIngs methoDs/tactIcs natIonal VIc nsW FIrst home

BuYers

saving through a regular savings account

37.3% 43.2% 31.6% 59.0%

selling my home and using the profit/funds from the sale

36.5% 35% 31.6% 3.7%

renting and buying an investment property

8.9% 8.2% 15.8% 11.8%

Borrowing money from parents to pay a deposit

7.4% 9.7% 5.3% 14.0%

living with parents and investing 6.1% 6.6% 7.9% 13.2%

using a parental guarantor to help secure a loan

5.9% 7.4% 2.6% 15.4%

saving through a first home saver account

5.9% 6.2% 4% 14.0%

Buying a new home to maximise changes to first home buyer grants

5.6% 5.5% 6.6% 13.2%

Buying with friends 4.4% 4.7% 4% 5.15%

most popular saVIngs methoDs/tactIcs to enter the propertY marKet

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home DeposIts

We’ve become a nation of savers, with nearly 40% of buyers planning to have more than a 20% deposit.A fifth of respondents (21.8%) plan to have a deposit between 11-20%

First home buyers are struggling to save a sizeable deposit. The majority of first home buyers (41.6%) will save a deposit of between 5-10%. Only 21.9% plan to have a deposit greater than 20%. Only 24.9% will have a deposit between 11-20%, and 11.7% will save a deposit of less than 5%.

home DeposIts natIonal VIc nsWFIrst home BuYers

planning to have a deposit of more than 20% when they buy

38% 36.9% 35.1% 21.9%

planning to have a deposit of 5-10% when they buy

29.9% 32.7% 28.4% 41.6%

planning to have a deposit between 11-20% when they buy

21.8% 21.2% 27% 24.9%

planning to have a deposit of less than 5% when they buy

10% 9.2% 9.5% 11.7%

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space is a priority for buyers. 49.4% would not compromise on the size of a property in order to live in their ideal areas. outdoor space and access to public transport are also non-negotiables for buyers. However, both Victorians and NSW buyers viewed these factors as less of a priority, ranking below the national average.

Being in a school zone was much more important for Victorians (44.2%) and NSW residents (36.8%) than the national average (19.5%).

Factors BuYers WoulD not compromIse to BuY In theIr IDeal area

natIonal VIc nsW

size of property 49.4% 35.9% 43.4%

outdoor space/garden 44.2% 32.1% 21.1%

access to public transport 41.8% 29.4% 31.6%

proximity to shops, cafes and restaurants 34.8% 28.7% 21.2%

Distance from work 30.4% 33.6% 27.7%

proximity to friends and family 28.1% 27.6% 35.5%

proximity to cBD 27.5% 31.7% 38.2%

access to parks and communal spaces 22.3% 28.3% 23.7%

Being in a school zone 19.5% 44.2% 36.8%

Factors BuYers WoulD not compromIse to BuY In theIr IDeal area

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media inquiriesAnna Kenneally / Mia Cochrane at Keep Leftanna@keepleft.com.au / mia@keepleft.com.au(03) 9268 7800