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A study of the mortgage market in Australia
April 2011
               barometer



contents
Introduction                                                                                                                                       3

Methodology                                                                                                                                        4

Executive Summary                                                                                                                                  5

1.0     Current Issues                                                                                                                             8

2.0     National Findings                                                                                                                        10

3.0     First Home Buyers                                                                                                                        15

4.0     Owner Occupiers                                                                                                                          19

5.0     Property Investors                                                                                                                       22

6.0     New South Wales & Australian Capital Territory                                                                                           25

7.0     Victoria & Tasmania                                                                                                                      29

8.0     Queensland                                                                                                                               33

9.0     Western Australia                                                                                                                        37

10.0 South Australia & Northern Territory                                                                                                        40




DISCLAIMER: The information, views and opinions contained in this publication have been obtained and/or are derived from Brand Management
Pty Limited (CoreData) based on its own research (including a survey of a sample of Australian consumers conducted during February 2011)
and do not necessarily represent the views or opinions of QBE Lenders’ Mortgage Insurance Limited (QBE LMI). This publication is provided for
informational purposes only and is not intended to constitute legal, financial or other professional advice and has not been provided with regard to
the investment objectives or circumstances of any particular reader. While based on information believed to be reliable, no guarantee is given that
it is accurate or complete and no warranties are made by QBE LMI as to the accuracy, completeness or usefulness of any of the information in this
publication. The opinions, forecasts, assumptions, estimates, derived valuations and target price(s) (if any) contained in this material are as of the
date indicated and are subject to change at any time without prior notice. The information referred to may not be suitable for specific investment
objectives, financial situation or individual needs of recipients and should not be relied upon in substitution for the exercise of independent
judgment. Recipients should obtain their own appropriate professional advice. Neither QBE LMI nor other persons shall be liable for any direct,
indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way from the information contained
in this material. This material may not be reproduced, redistributed, or copied in whole or in part for any purpose without QBE LMI’s prior expressed
consent. QBE Lenders’ Mortgage Insurance Limited ABN 70 000 511 071.

2
introduction
Welcome to the annual QBE LMI mortgage report,
“lmiBAROMETER – A study of the mortgage market in
Australia” prepared exclusively for QBE LMI by leading
market intelligence and research company CoreData.
Following a nationwide survey of mortgage holders,
property investors and first home buyers, the aim of
this report is to track consumer trends and perceptions
of mortgages and property.
This report will be used as the benchmark for future
reports and the research will track year-on-year
changes in the mortgage and property market from the
perspective of the Australian consumer.
The report is split into three sections:
1.	 National	findings
2.	 Segment	breakdown
   – First home buyers
   – Owner occupiers
   – Property investors
3.	 State	breakdown	(groups)
   – New South Wales (NSW) and Australian Capital
     Territory (ACT) combined.
   – Victoria (Vic) and Tasmania (Tas) combined.
   – Queensland (Qld).
   – Western Australia (WA).
   – South Australia (SA) and Northern Territory (NT)
     combined.
Each year the report will aim to provide topical
information on events affecting the mortgage and
property markets. The 2011 report reveals the impact
of natural disasters on mortgages and property as well
as the propensity of respondents to borrow against
their residential property to invest in business.




                                                          3
    barometer



methodology
                The information, views and opinions in the annual
                lmiBAROMETER – A study of the mortgage market in
                Australia is based on research carried out by CoreData
                and includes quantitative data gathered from Australian
                respondents during February 2011.
                An online survey was developed and hosted by
                CoreData following liaison with QBE LMI.
                The online survey was conducted from 15th through
                to 28th February 2011. Target respondents were
                Australian mortgage holders and Australians without
                mortgages who said they were looking to purchase
                property within the next five years.
                Respondents were sourced from CoreData’s
                proprietary panel of more than 118,000 Australian
                consumers.
                A total of 864 responses were gathered, of whom 611
                said they currently had a mortgage and 253 said they
                did not currently have a mortgage.




4
“while the rebuilding costs will be substantial it has
done little to dampen the enthusiasm of the locals in
the areas that are affected”




executive summary
An economy waiting for the second shoe to drop             Self-reported mortgage stress remains high
At the time of writing this report, the Australian         More than one quarter of the owner occupier
economy, despite passing through the Global Financial      segment of respondents consider themselves to
Crisis (GFC) largely unscathed is in something of a        be under mortgage stress (26.9%), yet at current
hiatus. With cash savings at record levels and with        mortgage interest rate levels only 2.3% say they are
both personal and business debt in the bottom of the       unable to meet their repayments on their current
range of normal, consumers and businesses are trying       household income.
to make sense of the new economic signals.
                                                           However, many economists and media outlets are
Like all Western economies, the Australian mortgage        expecting further interest rate hikes throughout 2011
market is highly sensitised to the state of the broader    with the common theme being a 0.25% rise early in
economy and this report reveals the depth to which         the third quarter of the year and possibly a second
the mixed signals of the economy combined with the         towards the end of the year or early 2012.
effect of local and international natural disasters are
                                                           Should these rate rises occur, the proportion of
affecting the market place.
                                                           respondents who say they would be unable to meet
One Australian state that has felt the full effects of     their mortgage repayments is likely to increase
nature is Qld with Cyclone Yasi and severe flooding        substantially. Overall, a 0.25% rate rise would render
impacting the state. But while the rebuilding costs        11% of current mortgage holders unable to pay
will be substantial it has done little to dampen the       their mortgage (self-reported) and should a further
enthusiasm of the locals in the areas that are affected.   0.25% rise eventuate this number increases to 23%
                                                           (self-reported).
In fact, 59% of the Queenslanders surveyed say the
cyclone and floods have not changed their intention        Following the Melbourne Cup day rate rise in
to consider purchasing property in this area and only      November 2010 and the subsequent additional rate
27% say it has changed their opinion permanently.          hikes by the major banks, mortgage holders are
                                                           beginning to feel the pinch and should there be any
Nor have the natural disasters propagated an
                                                           further rate rises, the number of affected borrowers
investment rush with only 27% of the respondents
                                                           may continue to rise.
stating that they see an opportunity to buy property at
deflated prices in disaster-prone areas and only 10%       The leading states for mortgage stress (self-reported)
demonstrating a strong intention to purchase in            are SA/NT and WA with both groups having around
these areas.                                               30% of respondents claiming to be under mortgage
                                                           stress. Qld follows with 28% of respondents ahead of
Prior to the natural disasters, property investors
                                                           NSW/ACT with 25% of respondents.
were the most likely segment of respondents to be
considering buying property in the disaster-affected       Interestingly, Vic/Tas respondents report a level of
areas (71%), yet post-disasters they are now less likely   mortgage stress well below the rest of the nation
to consider buying property in these areas.                at only 15% – a surprising outcome given a larger
                                                           proportion of these respondents (2.4%) say they are
                                                           unable to meet their current repayments compared
                                                           with both NSW/ACT (1.4%) and Qld with 2.2%.




                                                                                                                    5
            barometer




Respondents who are younger are more likely                 suggesting the current economic uncertainty and
to report being under mortgage stress than their            Government support for first home buyers returning to
older counterparts. Some 31% of the youngest                normal levels may have had an impact.
respondents, Generation Y (under 31 years) report
                                                            However, the research suggests first home buyers are
being in mortgage stress, slightly ahead of Generation
                                                            still more likely to be considering buying property in the
X (32 – 46 years) at 26%.
                                                            immediate future with some 22% of first home buyer
This is in line with the typically lower earning capacity   respondents considering buying within the next six
of younger people, coupled with the generally higher        months and 50% considering buying property within
loan-to-value ratio as covered later in this report.        the next 12 months.
The research suggests that property investors               Owner occupiers appear to be much more lenient
have a higher tolerance for mortgage stress than            with their timing with only 23% of owner occupier
owner occupiers. Only 19.5% of property investor            respondents planning on purchasing property in the
respondents consider themselves to be under                 coming 12 months.
mortgage stress, which is noticeably less than owner
                                                            NSW/ACT respondents have the highest intention to
occupier respondents at 26.9%.
                                                            purchase property in the next six months (15%) with a
The research also suggests that property investors          further 33% planning to do so within the next year.
are slightly better placed than owner occupiers to
withstand a 0.25% rate rise – only 8.3% of property         Major drivers in mortgage selection
investor respondents say they would then be unable to       With all segments of respondents, the research
make their repayments compared to 11.4% of owner            suggests that the single biggest driver for choosing
occupier respondents. However, should rates increase        a mortgage is the quoted interest rate – followed
by 0.50% the proportion that say they would be              quickly by the level of associated fees, low deposit
unable to meet their obligations falls back in line with    requirement and availability of an offset account,
the owner occupier segment.                                 depending on the type of borrower being targeted.
Intention to buy                                            For first home buyers and owner occupiers, the
                                                            availability of an offset account rated considerably
Having witnessed a boom in the first home buyer
                                                            higher than the availability of redraw facilities, despite
market following the Government’s GFC-driven
                                                            their similarity.
stimulus package, our research indicates we are now
seeing below trend numbers of first home buyers.            Across the states some variation beyond price (interest
                                                            rate and fees) was revealed.
First home buyers make up 15.0% of the total number
of respondents in the survey.                               Respondents from NSW/ACT and Vic/Tas place more
                                                            importance on the availability of an offset account
The leading state group for first home buyer
                                                            than the ability of low deposit requirements, whereas
respondents is NSW/ACT with 18%, slightly higher
                                                            respondents from WA, Qld and SA/NT consider the
than first home buyer respondents in Vic and Tas
                                                            importance of these to be reversed.
(16%). Conversely, SA/NT have the smallest proportion
of first home buyer respondents at only 12%, slightly       Further, respondents from NSW/ACT and WA place
fewer than WA (14%).                                        slightly higher importance on the option to split
                                                            between fixed and variable interest rates, rating it the
According to the survey results, only 11% of
                                                            fifth most important factor. Respondents from all other
respondents are considering buying property in the
                                                            states place this feature sixth – except for the SA/ NT,
next six months and 30% in the next 12 months
6
who do not consider this to be important at all rating it
the least important factor.
The survey results show that across the generations,
Pre-Boomers (67 years and older) view low deposit
requirements as the second most important
consideration in a mortgage, above even that of fees.
Baby Boomers (47 – 66 years) however are more
attracted to loans that offer an offset account.
Despite the amount of money spent on branding
across the lending industry, all segments of
respondents (property investors, owner occupiers
and first home buyers) and state groups (excluding
respondents in NT and SA), view brand as the least
important motivator when selecting a home loan.
Also at the bottom of the importance range, reflecting
perhaps a belief in a long term low interest rate
environment – a corollary no doubt of the economic
uncertainty – is the ability to fix your interest rate.

Mortgage brokers a resource
Around 42% of respondents utilise the services of a
mortgage broker while more than 35% shop around
for mortgages via their own research.
A small minority (11.9% of respondents) simply take
out a mortgage with the lender they have an existing
relationship with.
Respondents from SA/NT show the highest use
of brokers (51.8%) and subsequently the lowest
propensity to conduct their own research for
mortgages (27.0%).
Those respondents from Vic/Tas have the lowest use
of brokers (33.7%) and are the only respondents who
are more likely to conduct their own research (41.0%).




                                                            7
           barometer



1.0 current issues
Natural disasters                                          Overall, 27% of respondents see an opportunity to
                                                           buy property at deflated prices in disaster prone areas,
The devastation caused by the spate of recent natural
                                                           however the intention amongst this group to act on
disasters is unprecedented in Australian history.
                                                           this opportunity is quite low with only 10.3% showing
The Victorian Black Saturday bushfires in 2009,            strong intention to act (based on a score of 7-10, with
the flooding in Qld, Northern NSW and WA and               10 being very likely).
the devastation brought by Cyclone Yasi earlier this
year certainly left their mark on property owners and      Borrowing to fund business
investors.
                                                           Our research suggests that borrowing against
Of the 58% of respondents who would have                   residential property to fund business is not
considered purchasing property in these affected           commonplace.
areas, 51% say the disasters have not impacted on
                                                           Some 11% of respondents have previously borrowed
their intention to buy property, while 40% are no longer
                                                           against residential property to fund a business venture.
considering buying property in these areas or are
                                                           Of the minority who have leveraged residential property
considerably less likely to do so.
                                                           to fund a business venture, respondents from Qld are
Qld has the largest portion of respondents who would       the most likely to have done so (12%) and respondents
have considered purchasing property in the affected        from NSW the least likely (10%).
areas prior to the disasters (75%). Respondents from
                                                           Future appetite for this type of borrowing also remains
Vic/Tas and NSW/ACT followed, both with 58%.
                                                           tepid. Nearly one in five respondents indicated that
Prior to the disasters, property investors were the        they are either somewhat (13%) or very (7%) likely to
most likely segment of respondents to consider buying      borrow against residential property to fund a business
properties in these areas (71%). Yet post-disasters        in the future.
they are more likely than any other segment to say that
                                                           Of the segments of respondents, the property investor
they are now less likely to consider buying property in
                                                           segment is the most likely to have adopted this
the affected areas – which is interesting given property
                                                           strategy in the past (16%) however interestingly, only
investors often look for downturns in the market and
                                                           17% indicate they are likely to do so in the future – the
buy when prices are deflated. When asked if they see
                                                           lowest overall intention of the segments.
an opportunity to invest, 32% did – the most of any
segment of respondents. The research suggests that         Twenty four per cent of WA respondents indicated
while many property investors see the investment           they were likely to borrow against residential property
opportunities available, few are intending to act upon     to fund business in the future, the largest proportion
them.                                                      of the state groups. On the other hand, SA/NT
                                                           respondents are the least likely with only 16%.
The resilience of Queenslanders is clear with only 27%
of respondents who would have considered buying            Interestingly, Generation Y (under 31 years)
property in affected areas now saying they are no          respondents are the most likely to plan to borrow
longer or less likely to do so post disasters and 59%      against their property to fund a business venture in the
indicating that their decision has not been affected,      future (25%) and the intention to do so decreases with
well above the national average of 40%.                    age. Only 19% of Generation X (32 – 46 years) and
                                                           Baby Boomers (47-66 years) will adopt this strategy
Respondents from SA/NT are conversely the most
                                                           and no Pre-Boomers (67 years and older) reported an
likely to have changed their decision away from buying
                                                           intention to borrow against their residential property.
in property affected areas with 56% less likely to do so
now.
8
“Generation Y respondents are the most likely to
plan to borrow against their property to fund a
business venture”




Figure	1.1	How	likely	are	you	to	borrow	against	
your	property	to	fund	a	business	venture	in	the	
future?	(Segmented)
      %
100

                                                83
                             80
 80         77


 60


 40

                 23
                                  20
 20                                                   17


 0
      First Home Buyers   Owner Occupiers   Property Investors

      Unlikely   Likely




                                                                 9
            barometer



2.0 national findings
2.1 General                                                 Figure	2.2.1	-	Do	you	consider	yourself	to	be	under	
                                                            mortgage	stress?	(State	comparison)
The research suggests there is a strong appetite for
purchasing property in the short to medium term                   %
nationwide.                                                 100
                                                                                             85
Overall, 74% of respondents say they are intending                         75                                                                      75
                                                             75                                        70            72             70
to purchase property in the next five years with 29%
intending to do so by the end of 2011.
                                                             50
NSW/ACT respondents have the highest intention to
enter the property market in the next six months (15%)              25
                                                                                                  30            28             30
                                                                                                                                              25
                                                             25
– compared to only 8% of Vic/Tas respondents – while                                 15
a further 33% of NSW/ACT respondents are planning
to do so within the next year, compared to only 26% of        0
                                                                  NSW/ACT            Vic/Tas      NT/SA             Qld            WA        National
Qld respondents.
                                                                   Yes          No
Of those respondents looking to buy, 37% say they are
doing so for investment purposes and 63% as owner
occupiers. The large majority (91%) are planning on
borrowing to make the purchase with a new loan facility.
                                                            Figure	2.2.2	–	How	many	more	0.25%	interest	
2.2 Mortgages                                               rate	rises	could	you	sustain	before	you	would	
                                                            be	unable	to	pay	your	mortgage	on	your	current	
Overall respondents think it will take just under 15½
                                                            household’s	income?	(State	comparison)
years to repay their mortgage in full, however, only
three in five (62%) actually plan to repay their mortgage         %
without selling their property.                             20

25% of respondents consider themselves to be under                                                                                      15
                                                            15                                             14
mortgage stress. Despite this, the majority say they are                   12
                                                                                                                    13
                                                                                                                                                      12
not at immediate risk of not being able to meet their                                        11       11
                                                                                                                         10
repayments.                                                 10
                                                                                                                                    8             8

At current mortgage interest rate levels, only 3%                      5                 5
                                                             5
of respondents say they are unable to meet their                                     2
                                                                                                  3
                                                                                                                2
                                                                                                                               3
                                                                                                                                              2
mortgage obligations on their current household                    1

income. However if a 0.25% rate rise occurs, this            0
                                                                  NSW/ACT        Vic/Tas          NT/SA             Qld            WA        National
number increases to 11% and a 0.50% mortgage rate
rise sees this number rise to as much as 23%.                      I’m unable to pay my mortgage on             One           Two
                                                                   my current household income
Following the Melbourne Cup day rate rise in
November 2010 and the subsequent additional rate
hikes by the major banks, the research suggests
mortgage holders are beginning to run out of holes on
what is already a tightened belt. Should similar moves
from the banks accompany any further rate rises the
impact on borrowers could increase markedly.

10
“74% of respondents say they are intending to
purchase property in the next five years”




SA/NT and WA are feeling the pinch the most, both         Figure	2.2.3	-	Which	of	the	following	factors	are	
having around 30% of respondents claiming to be           important	to	you	when	selecting	a	mortgage?	
under mortgage stress. Qld follows with 28%, ahead        (National)
of NSW/ACT with 25%.
Interestingly, Victorian and Tasmanian (combined)                     Interest rate                                     8.6

respondents report mortgage stress levels well below                          Fees                            6.4
the rest of the nation at only 15% - a surprising
                                                          Low deposit requirement                       5.6
outcome given a higher proportion of these residents
(2.4%) say they are unable to meet their current                   Offset account                       5.6

repayments compared with both NSW/ACT (1.4%)                        Redraw facility                 5.0
and Qld with 2.2%.                                         Option to split between
                                                                                                    5.0
                                                                fixed and variable
Further, in the event that rates rise by as much as
                                                                Packaged options                  4.5
0.50%, some 19% of respondents from Vic/Tas say
they would be unable to meet mortgage commitments,               Fixed rate option                4.5

equal to that of NSW and the ACT.                                           Brand                 4.5

When selecting a mortgage, the research suggests                                      0   2   4           6         8         10
Australians are primarily concerned with the cost                                                       Average	ranking	1-10
involved.
The interest rate on offer matters above all else
and was clearly the most important factor amongst
respondents when selecting a mortgage, scoring
8.6 out of a possible 10. This was followed by fees
(6.4 out of 10) which is another real cost comparison
consumers consider when selecting a mortgage.
Low deposit requirements and availability of an offset
account (both scoring 5.6 out of 10) were the most
important secondary factors.
The opportunity for a redraw facility and the option
to split between fixed and variable rates were less
important (both 5.0 out of 10) as were the availability
of package deals, fixed rate options and the provider’s
brand (all 4.5 out of 10).
For first time borrowers and owner occupiers, the
availability of an offset account rated considerably
higher than the availability of redraw facilities.
Across the states some variation beyond price (interest
rate and fees) was revealed.




                                                                                                                               11
            barometer




Respondents from NSW/ACT and Vic/Tas place more             Figure	2.2.4	–	Propensity	to	use	mortgage	brokers,	
importance on the availability of an offset account over    own	research	or	to	go	with	existing	bank	when	
low deposit requirements. This comes as no surprise         selecting	a	mortgage	provider		
as these two states have the highest average deposit        (All	states	vs.	National)
savings and are the only states whose respondents
expect to have a minimum of 20% deposit.                         %
                                                            60
                                                                                                52
In comparison respondents from WA, Qld and SA/NT
                                                                                                               46
consider the availability of low deposit requirements       45    42                  41                                      40
                                                                                                                                             43
                                                                       39
more important; a reflection of their lower deposit                              34
                                                                                                                                   37
                                                                                                                                                  35
                                                                                                                    31
savings which are on average below 20%.                     30                                       27

Further, respondents from NSW/ACT and WA place
slightly higher importance on the option to split           15              11
                                                                                           14
                                                                                                          10
                                                                                                                         12             12             12
between fixed and variable interest rates, rating it the
fifth most important factor. Respondents from all other      0
states place this feature sixth – except for SA/NT, who          NSW/ACT         Vic/Tas        NT/SA           Qld              WA          National
do not consider this to be important, rating it the least
                                                                  Yes via a mortgage            Yes via my own                No, I went/would go
important factor.                                                 broker                        research                      with my existing bank
The research suggests that although the services
of mortgage brokers are often used, a considerable
portion of people prefer to do their own research
for mortgages. Some 43% of respondents utilise
the services of a mortgage broker while 35% shop
around for mortgage products via their own research.
A minority of respondents (11.9%) simply take out
a mortgage with the lender they have an existing
relationship with.
Respondents from SA/NT show the highest use of
brokers (52%) and subsequently the lowest propensity
to conduct their own research (27%). Those from Vic/
Tas show the lowest use of brokers and are the only
respondents who are more likely to conduct their own
research (41%) than to use a broker (34%).




12
The survey shows the average property buyer has            Figure	2.2.5	–	The	proportion	of	deposits	over	20%	
a deposit of 20.7% (as a proportion of the purchase        against	those	under	20%	(States	vs.	National)
price) and is intending to borrow an average of
$355,573.72, with the average maximum price being               %
                                                           75
$513,504.17 and the average deposit size being
                                                                       60
$97,257.58.                                                                   54                           54
                                                                                                                  58
                                                                                          51 49                               49 51
The average deposit amount is heavily weighted by the      50                      46                 46
                                                                  40                                                   42
more populated eastern coast states of NSW, ACT, Vic
and Tas where the deposit amounts tend to be higher.
Respondents in the other states all anticipate deposits    25
of less than 20% – see figure 2.2.3.
Only 9% of respondents have a guarantor on their
                                                            0
loan and of these few, the vast majority (89%) use their         NSW/ACT      Vic/Tas     NT/SA         Qld         WA        National
parents.                                                        (Av deposit (Av deposit (Av deposit (Av deposit (Av deposit (Av deposit
                                                                  21.7%)      22.0%)      19.9%)      19.8%)      19.8%)      20.7%)
The market for interest only loans appears to be
surprisingly popular with 37% of respondents agreeing            Deposit of 1-19%         Deposit of 20% and above

they would consider this as an option in order to
increase their buying power.
The research suggests that the average time taken
to save a deposit is 4.2 years with WA respondents
(3.7 years) and Qld respondents (3.8 years) being the
quickest deposit savers and SA/NT respondents
(4.7 years) and NSW/ACT respondents (4.3 years)
the slowest.
Just over 64% of respondents sourced their deposit
from savings, the most popular method and well
ahead of equity in their existing property (25%) and the
proceeds from the sale of an existing property (22%).




                                                                                                                                    13
           barometer

“38% of respondents think 2011 will be the best time
to purchase a residential property”

2.3 Sentiment                                              per cent are looking for an existing townhouse, slightly
                                                           more than the proportion seeking an existing unit
The strong appetite for purchasing property is
                                                           (18%).
interesting considering 63% of respondents think
property is currently overpriced. The research suggests    City fringes are the most popular areas for property
this could be due to a sense of urgency amongst            hunters, with 43% considering purchasing property in
respondents to get in and buy property before prices       these areas, slightly more sought after than property
rise even further.                                         in the outer suburbs which are attracting a similar
                                                           proportion (40%).
Some 39% of respondents believe property prices will
be higher in 2011 than they were in 2010. Only 25%         Almost one quarter of the respondents planning
of respondents are expecting a pullback while the          on purchasing property in the next five years
remaining 33% are expecting no change in property          are considering the inner city suburbs, 20% are
prices.                                                    considering regional centres and some 12% are
                                                           looking at rural areas.
Overall 38% of respondents think 2011 will be the best
time to purchase a residential property and of these,
69% see the ideal time being within the first six months   Figure	2.3.1	-	In	which	area(s)	are	you	looking	to	
of the year.                                               buy?	(National)

Interestingly, 62% of respondents agree that getting             City fringe                                           43
into the property market now is more important than
saving a bigger deposit and 58% agree that property          Outer suburbs                                        40

prices will increase strongly over the coming three               Inner city                           24
years.                                                     Regional centres                       20
Overall 36% of respondents perceive property to be a                  Rural                 12
reliable blue chip investment or one that should be part
                                                                  Interstate       6
of a diversified asset allocation (31%).
Some 17% of respondents see property as an effective                           0       10        20         30   40         50
                                                                                                       %
way to build wealth quickly and despite the highly
publicised property market crashes in the US and UK
during the GFC, only a small fraction (13%) believe that
property can be a risky investment.
The results suggest a perception that owning a
property is part of a retirement funding strategy. Forty
percent of respondents see their main residence as an
investment to help fund retirement and 34% see it as a
home for retirement.
Of the respondents planning on purchasing property
in the next five years, 69% are looking to buy an
existing house, by far the most popular dwelling
style and almost twice as popular as a new housing
development (38%), which rated second. Twenty one


14
3.0 First Home Buyers
3.1 General                                                Figure	3.1.1	–	First	home	buyers	by	state	
The explosion of first home buyers as a result of the           %
Labor Government’s stimulus package in 2009 and the        20
                                                                    18
low interest rate environment resulting from the GFC is                     16
                                                                                                          15
well and truly over.                                       15                               14    14
                                                                                     12
We are now seeing below trend numbers of first home
buyers who make up on average only 15% of the              10
respondents in the survey.
                                                            5
The eastern states lead the nation with NSW/ACT
recording the highest proportion of first home buyers
(18%), closely followed by Vic/Tas with 16% and Qld,        0
                                                                NSW/ACT   Vic/Tas   NT/SA   Qld   WA    National
just below the national average with 14% of first home
buyers.
The number of first home buyers in WA is on par with
the national average (14%) and ahead of SA/NT – the
group with the smallest proportion – with just over one
in ten (12%) being first home buyers.
First home buyer respondents are coming
predominantly from the rental market (80%) although
some 18% are currently living with their parents.

3.2 Mortgages
The survey results show that first home buyers tend to
conduct more research on mortgages, rely on external
advice and have lower initial deposits.
More than any other segment of respondents, first
home buyers rely on savings for their deposit with
virtually all (91%) using savings for their deposit.
Government grants are the next most popular, used by
15% of respondents.
The average first home buyer takes four years to
save their deposit. The fact that nearly one in five are
currently living with their parents may assist them to
save the deposit in a shorter timeframe than might
otherwise be possible.
The most common method of saving a deposit
among the first home buyer segment is an online high
interest savings account, significantly higher than the
proportion of the overall sample of respondents (54%


                                                                                                               15
            barometer




vs. 39%) – clearly linked to their relatively younger age    The use by first home buyers of mortgage brokers is
(49% aged 21 – 30 years), given the affinity younger         in line with the overall sample of respondents at 41%,
generations have towards the internet.                       however a slightly higher proportion of first home
                                                             buyers shop around via their own research (42%), the
Some 26% of first home buyers store their deposit in
                                                             most likely segment to do so.
a regular savings account, which is interesting given
the accessibility, ease, higher interest rates and at call   The research suggests that first home buyers are
nature of online accounts.                                   generally younger than other home buyers and do not
                                                             have significant ties with a particular bank or lender
The research suggests first home buyers are the least
                                                             and as such only 4% are likely to go with their existing
likely segment of respondents to use term deposits
                                                             bank compared to the overall average at 12%.
(10%); invest through the share market (6%) or via
managed funds (2%), possibly due to a desire to move         In choosing a mortgage, first home buyers, like all
quickly and have access to the money when the right          respondents, consider the interest rate to be the most
opportunity arises.                                          important consideration, rating this 8.4 out of 10,
                                                             followed by fees (6.6 out of 10) and the availability for
Considering the high use of online savings accounts
                                                             low deposit (6.3 out of 10).
amongst younger first home buyers (49% aged
21 – 30 years), the term deposit (10%), while not            In terms of loan features, these respondents rate the
extinct, could become an endangered species among            availability of an offset account considerably higher
generations to come.                                         than redraw facilities (5.2 vs. 4.3 out of 10).
As might be expected, first home buyer respondents
                                                             3.3 Sentiment
expect a lower average deposit of 15.87% of the
property price, almost five percentage points below          All first home buyers surveyed stated that they are
the overall average for all respondents (20.8%).             intending to make their purchase in the next five
In dollar terms, the survey results show that the            years. Compared to other types of respondents who
average deposit of first home buyer respondents is           are buyers, first home buyers are significantly more
$58,047 which is well below the overall average for all      eager to enter the market with some 22% looking at
respondents of $97,632.                                      buying within the next six months and 50% planning to
                                                             purchase within the next 12 months.
Furthermore, some 17% of first home buyers have
a guarantor for their loan, most of whom name their          In comparison, the percentage of overall respondents
parents (83%).                                               who are considering buying in the next six months
                                                             is 11% and 30% for those looking to purchase a
What is surprising about these respondents is that on
                                                             property in the next 12 months.
average they are intending to borrow $359,786 – the
most of any segment. This is despite the first home          The research reveals significant differences regarding
buyer segment having the lowest average maximum              perceptions of current property prices amongst
purchase price of $475,812 with all other segments           respondents and whether or not such prices
averaging above $500,000.                                    represent fair value. Nationally, 63% of respondents
                                                             think property prices are either somewhat (45%) or
The research suggests that the lower average deposit,
                                                             significantly (18%) overvalued. First home buyers,
higher average borrowings and relative inexperience of
                                                             however, are more sceptical. Some 83% consider
first home buyers, leads first home buyers to conduct
                                                             prices to be overvalued including a staggering 42%
more research themselves on mortgage products and
                                                             who perceive them to be significantly overvalued.
to rely on the expertise of professionals.

16
“first home buyer respondents expect a lower average
deposit of 15.87%”




Figure	3.2.1	-	Which	of	the	following	factors	are	important	to	you	when	selecting	a	mortgage?		
(First	home	buyers	vs.	National)

     Average	ranking	1-10
10
           8.4                                                                                 8.7
 8
                  6.6               6.3                                                                6.3
 6                                                                                                             5.7        5.6
                         5.2                     5.2                                                                              5.0      4.9
                                          4.3               4.5   4.5      4.5                                                                       4.5   4.5   4.5
 4

 2

 0
                                 First home buyers                                                                              National

                                      Interest rate                     Fees                   Offset account
                                      Low deposit requirement           Redraw facility        Option to split between fixed and variable
                                      Packaged options                  Fixed rate option      Brand




Figure	3.3.1	-	What	style	of	property	are	you	looking	to	buy?	(First	home	buyers	vs.	National)

     %
80           76
                                                                                                  69

60


40                37                                                                                      38
                        33     29

                                          18                                                                   20    18
20                                              15     17
                                     14
                                                                                                                            11    10       9     9
                                                              6   6       8                                                                            8
                                                                                                                                                            5    4
 0
                                 First home buyers                                                                              National

                               Existing house                                 New development – house           Existing townhouse
                               Existing unit                                  Existing semi-detached            New development – townhouse
                               Existing terrace                               New development – unit            Land only
                               New development – semi-detached                New development – terrace




                                                                                                                                                                       17
     barometer




“First home buyers have     The research suggests that in making the decision
                            to purchase their first property, emotion does come
the highest proportion of   into play for first home buyers. While 50% of first
                            home buyers say they intend to purchase in the next
respondents looking at      year, only 33% believe this is the best time to do so
                            and 83% think the market is currently overvalued. In
inner city areas”           fact 17% of first home buyers do not think the next
                            12 months is the best time to purchase property.
                            Furthermore, 49% agree it is more important to get
                            into the property market now than to wait and save a
                            bigger deposit.
                            When it comes to dwelling style, the research suggests
                            that the Australian dream appears to lie in buying a
                            pre-loved home with 76% of first home buyers looking
                            at existing houses. This is the largest proportion of any
                            of the respondent segments and they are conversely
                            the least likely to consider a new house development.
                            First home buyers are substantially more likely to
                            consider buying an existing townhouse (33%), unit
                            (29%) or terrace (15%) or a new townhouse (18%) or
                            unit (17%) than the overall respondent sample, possibly
                            due to a typically lower budget with which to play.
                            Just over half of first home buyers (52%) say they are
                            considering buying property on the city fringe – slightly
                            more than in the outer suburbs (46%). First home
                            buyers have the highest proportion of respondents
                            looking at inner city areas (29%) and the lowest
                            proportion looking to purchase in regional centres
                            (18%) or interstate (4%), clearly reflective of their
                            younger demographic.




18
4.0 owner occupiers
4.1 General                                               Figure	4.1.1	–	Owner	occupiers	by	state	
Owner occupiers make up the largest segment of                 %
respondents at almost two thirds (65%). This segment      80
                                                                                           71
includes first home owners and next home owners,                           64       66           67     65
some with mortgages and some without.                     60       58

Qld has the largest proportion of owner occupiers
with 71%, ahead of WA (67%), SA/NT (66%) and Vic/         40
Tas (64%). NSW/ACT has the smallest proportion of
owner occupiers (58%), which may reflect the housing      20
affordability problems particularly in NSW.
                                                           0
4.2 Mortgages                                                  NSW/ACT   Vic/Tas   NT/SA   Qld   WA   National

The research suggests that in comparison to property
investors, owner occupiers are considerably more
likely to consider themselves to be under mortgage
stress. Some 27% of owner occupier respondents
consider themselves to be under mortgage stress,
yet at current interest rate levels, only 2% say they
are unable to meet their repayments on their current
household income.
RBA rate rises have generally been tipped for the
second half of 2011 and possibly into 2012. In recent
times the major banks have been known to increase
their interest rates above that of the RBA.
Should interest rate rises occur in the future, a
proportion of owner occupier respondents say their
ability to meet repayments will decrease. A 0.25% rate
rise will render more than 11% of owner occupiers
(self-reported) unable to meet mortgage repayments
and a further rise will see this proportion increase to
23% (self-reported).
Of those respondents planning on buying property
in the next five years, 89% say they are planning to
borrow to make this purchase and virtually all (98%)
are seeking a new loan facility.
The survey results show that owner occupier
respondents have on average a deposit of 21.6% as
a proportion of the purchase price. This equates to




                                                                                                             19
            barometer




around $105,670 and takes on average 4.2 years to            Owner occupiers looking to buy are predominantly
save. Saving is again the primary source of deposit          seeking existing houses (66%) followed by new
(60%) for respondents and while the sale of an existing      housing developments (38%) with other dwelling types
property was the next most popular source of deposit         less appealing. Only 15% are considering buying an
(28%), equity in an existing property was not far            existing townhouse and 13% an existing unit.
behind (25%).
                                                             The desire to purchase a house often tends to force
The research suggests owner occupiers generally are          buyers away from the more expensive inner city and
middle age (60% of owner occupier respondents are            city fringes. Research suggests owner occupiers tend
aged between 31-50 years) and as they already have           to be older and are most likely to be working families
existing equity in their current home, they generally        and hence are looking for space to raise a family and
have more purchasing power. On average, owner                to live in relative comfort.
occupier respondents intend to borrow $347,139.83
                                                             In line with this, the owner occupier segment was the
and have the largest average maximum purchase price
                                                             only one to prefer the outer suburbs to the city fringe
of $523,501.
                                                             albeit only marginally (42% and 41% respectively). They
In selecting a mortgage, owner occupiers consider            are also the most likely to consider buying property
(aside from cost i.e. interest and fees) offset accounts     in rural areas (15%) and conversely the least likely to
(5.8 out of 10), low deposit requirements (5.4 out           consider buying property in inner city suburbs (22%).
of 10) and redraw facilities (5.1 out of 10) as key
considerations.

4.3 Sentiment
The research suggests that as owner occupiers own
(or are paying off) their existing home they may be less
inclined to be looking to buy a new property. In relative
terms, owner occupiers are the segment of respondents
least likely to buy a new property in the next five years,
however, some 70% say they still plan to.
The research also suggests that those owner
occupiers who are planning to buy property are likely
to take their time in doing so with only 23% intending
to buy property in the next 12 months.
Comparing property prices year-on-year, 40% of
owner occupiers believe prices will be higher in 2011
than 2010, 25% believe they will be lower, while 32%
anticipate no change.
In terms of current pricing, 63% of owner occupiers
consider property to be overvalued, 25% consider it to
be fair value and only 10% believe it is undervalued.




20
Figure	4.2.1	-	Which	of	the	following	factors	are	important	to	you	when	selecting	a	mortgage?		
(Owner	occupiers	vs.	National)

     Average	ranking	1-10
10
           8.8                                                                               8.7
 8
                  6.2                                                                                6.3
 6                       5.8                                                                                 5.7        5.6
                                    5.4   5.1   5.0                                                                             5.0      4.9
                                                          4.4   4.4      4.4                                                                       4.5   4.5   4.5
 4

 2

 0
                                    Owner occupiers                                                                           National

                                      Interest rate                   Fees                   Offset account
                                      Low deposit requirement         Redraw facility        Option to split between fixed and variable
                                      Packaged options                Fixed rate option      Brand




Figure	4.3.1	-	What	style	of	property	are	you	looking	to	buy?	(Owner	occupiers	vs.	National)

     %
80
                                                                                                69
             66
60


40                38                                                                                    38


                                                                                                             20    18
20                      15     13                                                                                         11
                                      9                     8                                                                   10       9     9     8
                                          7     7     5                                                                                                   5
                                                                4       2                                                                                      4
 0
                                    Owner occupiers                                                                           National

                               Existing house                               New development – house           Existing townhouse
                               Existing unit                                Existing semi-detached            New development – townhouse
                               Existing terrace                             New development – unit            Land only
                               New development – semi-detached              New development – terrace




                                                                                                                                                                     21
              barometer



5.0 property investors
Figure	5.1.1	–	Property	investors	by	state	              5.1 General

     %                                                   The perceived tax advantages and strong capital
30                                                       growth attached to investment properties has driven a
         24                                              strong sentiment towards investing in property.
                          22
                 20                             20       The research suggests that high inner city property
20                                     19
                                                         prices have led to many potential first home buyers
                                 14                      sacrificing their dream to own their own home in the
                                                         short to medium term in order to live (rent) closer
10
                                                         to transport, entertainment venues and work – i.e.
                                                         inner city and city fringes. According to recent media
                                                         reports, the hole left in the market by the reduction
 0                                                       in first home buyers has been filled in some way by
     NSW/ACT   Vic/Tas   NT/SA   Qld   WA     National
                                                         property investors.
                                                         Of the total sample of respondents, 20% can be
                                                         classified as property investors. NSW/ACT has the
                                                         highest proportion of property investors at 24%,
                                                         followed by SA/NT with 22%.
                                                         Vic/Tas report 20% of property investors and Qld
                                                         has the lowest proportion of property investors with
                                                         just 14%.
                                                         Eighty per cent of property investor respondents
                                                         say they currently have a mortgage. The majority of
                                                         such mortgages are over residential property (87%),
                                                         although 11% of property investors have a mortgage
                                                         over both commercial and residential property.

                                                         5.2 Mortgage
                                                         The research suggests that property investors have
                                                         a higher tolerance for mortgage stress than owner
                                                         occupiers. Only 20% of property investor respondents
                                                         consider themselves to be under mortgage stress,
                                                         which is noticeably less than for owner occupier
                                                         respondents.
                                                         Property investors also appear to be slightly better
                                                         placed than owner occupiers to withstand interest
                                                         rate rises. A 0.25% rate rise would result in only 8%
                                                         of property investors saying they would be unable
                                                         to make their mortgage repayments, a considerably
                                                         smaller impact than the same rate rise would have on



22
“51% of property investors say they would consider
an interest only loan”




owner occupiers – however should rates increase by a        5.3 Sentiment
further 0.25%, property investors would fall back in line
                                                            Not surprisingly given their nature, property investors
with owner occupiers (23% respectively).
                                                            represent the largest proportion of respondents
The research suggests that property investors               intending to purchase a property in the next five years
are more likely than first home buyers and owner            (79%), including 8% who intend to purchase within
occupiers to adopt a leveraged strategy in order to         the next three months – the highest proportion for this
access a deposit. Some 42% of property investors say        timeframe among the three segments of respondents.
they use equity in an existing property, a substantially
                                                            The research suggests the majority of these purchases
higher proportion than for the overall sample of
                                                            will be as investments although 21% of respondents
respondents (25%).
                                                            plan to purchase a property with the intention of living
Property investors agree that it is important to get        in it.
into the property market now than to wait and save
                                                            Property investors are less likely to be looking at
for a bigger deposit (72%) including some 26% who
                                                            existing homes compared to the overall average for all
strongly agree with this sentiment.
                                                            respondents (61%) and are considerably more likely to
Furthermore, 51% of property investors say they would       be considering new development houses (46%).
consider an interest only loan in order to purchase a
                                                            The remaining dwelling types appear to be of little
more expensive property, including 20% who strongly
                                                            interest to property investors with existing townhouses
agree with this strategy – twice the overall sample of
                                                            (14%), existing units and semi-detached dwellings
respondents (10%).
                                                            (both 11%) the only other types to garner interest from
On average, property investors take four years to save      greater than 10% of the property investors.
their deposit and high interest online saver accounts
                                                            The research suggests that for property investors,
are the storage vehicle of choice, well ahead of regular
                                                            proximity to the city is a key factor when it comes to
saving accounts (37% vs. 25%).
                                                            location with less property investors willing to consider
The survey results suggest that in choosing a               the outer suburbs.
mortgage, property investors behave similarly to owner
                                                            While 41% of property investors are looking at buying
occupiers; however there are some small differences in
                                                            property in the city fringe, only 30% will consider
their secondary preferences.
                                                            buying property in the outer suburbs. The popular
Aside from cost factors of interest rates and fees,         nature of inner city living for young professionals and
property investors rate the availability of a low deposit   ‘DINK’ (Double Income No Kids) couples results in
requirement (5.6 out of 10) ahead of an offset account      attractive rental yields.
(5.5 out of 10), while owner occupiers place higher
                                                            Despite this, property investors show the most interest
importance on the offset account.
                                                            in properties in regional centres (24%) and interstate
Property investors are least concerned (as compared         (11%) of the three segments.
with other segments of respondents) with being able
                                                            Property investors are the least likely segment to
to split between fixed and variable rates (4.5 out of
                                                            anticipate year-on-year property price increases in
10) – an interesting finding given the usually savvy
                                                            2011 with only just over one third (35%) expecting
nature of investors. All other segments of respondents
placed packaged and fixed rate options along with the
lender’s brand as the least important factors.



                                                                                                                   23
              barometer




somewhat higher prices in 2011 than in 2010 and
none expecting much higher prices.
Property investors are also slightly more likely than
the other segment of respondents to expect to see a
downturn in the property market, with 28% expecting
lower prices compared to 26% of respondents overall
and around 38% saying current property prices are at
fair value, again a higher proportion than the overall
sample of respondents (25%). Some 47% of property
investors consider property prices to be overvalued.
With more than half of property investors rating current
prices as being at worst fair value, it comes as no
surprise that 32% believe the next six months will be
the best time to purchase residential property with
48% thinking the next 12 months is ideal.




Figure	5.2.1	-	Which	of	the	following	factors	are	important	to	you	when	selecting	a	mortgage?		
(Property	investors	vs.	National)

     Average	ranking	1-10
10
           8.6                                                                      8.7
 8
                 6.5                                                                        6.3
 6                     5.5   5.6                                                                    5.7    5.6
                                    5.0           4.8     4.8      4.8                                             5.0      4.9
                                          4.5                                                                                     4.5   4.5   4.5
 4

 2

 0
                             Property investors                                                                  National

                                Interest rate                   Fees                Offset account
                                Low deposit requirement         Redraw facility     Option to split between fixed and variable
                                Packaged options                Fixed rate option   Brand




24
6.0 New South Wales & Australian Capital Territory
6.1 General                                                  Figure	6.2.1	–	Do	you	consider	yourself	to	be	under	
                                                             mortgage	stress?	(NSW/ACT	vs.	National)
Australia’s most popular region, which accounts for
some 34% of residents1 – NSW and the ACT – has the                 %
highest proportion of first home buyer respondents in        100
Australia (18%).
                                                                                75                             75
Affordability of housing in NSW is known to be an             75

issue, with Sydney at the time of this report ranked
21st in Global Property Guide’s2 list of the most             50
expensive property markets, in terms of average price
per square metre.                                                        25                    25
                                                              25

This clearly impacts home ownership with the region
reporting the fewest owner occupiers with a mortgage           0
                                                                          NSW/ACT                   National
(around 58%).
                                                                   Yes   No
The strong rental market in Sydney however results in
the region having the highest proportion of property
investors (24%).
NSW/ACT also have the smallest proportion of
mortgage holders with 67% of respondents currently
having a mortgage compared to the average (71%),
which could reflect that many people in NSW/ACT
are not able to get onto the property ladder or that
incomes in NSW are higher relative to other states

6.2 Mortgages
The high property prices and cost of living associated
with NSW/ACT and in particular Australia’s largest
city, Sydney, has most likely led to a high proportion of
respondents shopping around for a mortgage provider
(82%) to get the best deal.
Mortgage brokers are the most popular method
of shopping around (42% of respondents) closely
followed by conducting own research (39% of
respondents). A minority of 11.9% of respondents
simply take out a mortgage with the lender they have
an existing relationship with.
Interestingly, while 25% of NSW/ACT respondents who
have a mortgage consider themselves to be under



1 http://www.abs.gov.au
2 http://www.globalpropertyguide.com/most-expensive-cities
                                                                                                                    25
            barometer




mortgage stress, only 1.4% say they are not able              Figure	6.2.2	–	How	many	more	0.25%	interest	
to meet their mortgage repayments on their current            rate	rises	could	you	sustain	before	you	would	
household income.                                             be	unable	to	pay	your	mortgage	on	your	current	
                                                              household’s	income?	(NSW/ACT	vs.	National)
In comparison, only 15% of Victorian and Tasmanian
respondents say they are currently feeling mortgage                %
stress yet some 2.4% are currently unable to pay their        15
mortgage.                                                                                12                                  12
This difference may be due to the higher cost of living       10
associated with a Sydney lifestyle.                                                                                  8


6.3 Deposit savings                                            5
                                                                                  5

Overall, 69% of NSW/ACT mortgage holders sourced                                                             2
their deposit from savings, the most of any region.                      1
They are also the least likely to use equity in an existing    0
                                                                             NSW/ACT                              National
property to buy the next one.
                                                                   I’m unable to pay my mortgage on my current household income
Online, high interest savings accounts are used by                 One
44% of NSW/ACT respondents to save and store their                 Two

deposit, more than twice the number that use the
more traditional regular savings accounts (20%) and
three times as popular as term deposits (14%).
Investments such as those in the share market (9%)
and managed funds (4%) are less popular, most likely
due to the increased risk involved.
Only 8% of respondents from NSW/ACT say they are
able to save their deposit in less than one year, well
below the national average (12%). Some 79% say they
were able to save their deposit in five years or less with
the average timeframe for these respondents in line
with the national average at 4.3 years (national average
- 4.2 years). The research suggests that the higher
cost of living in these areas and expensive property
market means residents have to work longer to save
their deposits.




26
6.4 Intention                                              Figure	6.4.1	–	Are	you	intending	to	buy	property/	
                                                           another	property	in	the	next	five	years?		   	
Despite the high cost of living and a perception that
                                                           (NSW/ACT	vs.	National)
property in the region is overpriced (See Section 6.5
Sentiment) respondents in NSW/ACT show the highest              %
level of intention to purchase property in the country.    40
Some 82% say they intend to purchase property in
the next five years compared to an overall average for     30                          29
                                                                                                                        26   26
respondents of 74%.
                                                                             19   19                               19
Of the NSW/ACT respondents, 33% say they are               20                               18               18
looking to purchase in the next 12 months and 53% in
the next two years.                                        10       7   8
                                                                                                   5     6
The appetite for investment properties remains high
in NSW/ACT with 41% of respondents intending to             0
purchase property for investment, slightly higher than                      NSW/ACT                          National
the overall sample at 38%.
                                                                Yes, within the next 3 months    Yes, within the next 6 months
NSW/ACT respondents are predominantly seeking to                Yes, within the next 12 months   Yes, within the next 2 years
purchase existing houses (67%), considerably more so            Yes, within the next 5 years     No

than any other dwelling type. The next most popular
are new house developments (26%) followed by
existing units (20%) and existing townhouses (20%).
Around 41% of this state group are looking at the
outer suburbs or the city fringe 39% for their purchase,
26% are considering regional centres and 25% inner
city suburbs.

6.5 Sentiment
The sentiment towards property prices in NSW/ACT
remains above that of the national average and most
still see property as being overvalued. Some 40% of
NSW/ACT respondents believe residential property
prices will be somewhat higher in 2011, compared to
just 37% from the nationwide sample of respondents.
NSW/ACT residents, however, still see property as
being expensive with 45% of respondents considering
residential property prices as somewhat overvalued
and 28% significantly overvalued. But just like first
home buyers, this is not impacting their perceptions
about when is a good time to buy. Twenty three per




                                                                                                                                  27
             barometer




cent believe the next six months represents the best            Figure	6.5.1	–	Comparing	the	coming	year	(2011)	
time to purchase residential property and furthermore,          to	the	previous	year	(2010),	do	you	think	residential	
58% agree that property prices will increase strongly in        property	prices	will	be	higher	or	lower?		
the next three years.                                           (NSW/ACT	vs.	National)
Given that respondents generally consider property                   %
to be overpriced but that most expect strong price              50
growth over the next three years, it comes as no                                         40
surprise that 65% of NSW/ACT respondents agree                  40                                                           37
                                                                                   35
                                                                                                                       33
that it is better to get into the property market now
                                                                30
rather than to wait and save for a bigger deposit – in                                                            23
line with the national findings.                                20           17

NSW/ACT respondents are considerably more likely
                                                                10
than the nation as a whole to consider their main                                                  4         3                         3
                                                                                              2                                   2
residence to be a home for retirement (40% vs. 34%) –            0
                                                                         1

all other regions consider their main residence to be an                          NSW/ACT                              National
investment to help fund their retirement (37%).
This research suggests that NSW/ACT residents are                    Much lower this year                  Somewhat lower this year
                                                                     Neither lower nor higher this year    Somewhat higher this year
less transient than the rest of the nation. When they                Much higher this year                 Don’t know
purchase their main residence they claim to do so
with the intention of retiring in that dwelling. In all other
states, a higher proportion of residents are looking to
possibly sell and downgrade and use the balance of
funds to help pay for their lifestyle in retirement.            Figure	6.5.2	–	How	do	you	view	your	main	
                                                                residence?	(NSW/ACT	vs.	National)

                                                                     %
                                                                50

                                                                                        40                        40
                                                                40           37
                                                                                                                            34
                                                                30                                                                26
                                                                                              23
                                                                20

                                                                10

                                                                 0
                                                                                  NSW/ACT                              National
                                                                     An investment to help fund your retirement
                                                                     A home for retirement
                                                                     Unsure




28
7.0 Victoria & Tasmania
7.1 General                                                Figure	7.2.1	–	Do	you	consider	yourself	to	be	under	
                                                           mortgage	stress?	(Vic/Tas	vs.	National)
Victorian and Tasmanian respondents include 64%
owner occupiers, 20% property investors and the                  %
remaining 16% as first home buyers.                        100
                                                                                      85
Some 71% of Vic/Tas respondents say they have                                                                75
                                                            75
a mortgage, again in line with the national average
for respondents (also 71%), yet these states have
mortgage stress levels that are well below the national     50
average.
                                                                                             25
                                                            25
As discussed below, this is most likely due to the lower               15
cost of living compared to NSW/ACT and the lower
loan to value ratios within Vic and Tas.                     0
                                                                            Vic/Tas               National
Residents in these states are also the most optimistic
                                                                 Yes   No
about property price increases however only 29.1%
have an intention to buy in the next 12 months.

7.2 Mortgages
Of those respondents who do not have a mortgage
but are looking to borrow in order to purchase property
in the future, 78% shopped around for their mortgage
or intend to do so.
These regions display the least interest in mortgage
brokers overall. Vic/Tas respondents are more likely
than any other state group to shop around via their
own research (41%) and are also the only respondents
to prefer their own research to the use of a mortgage
broker (34%).
Further, Vic/Tas have the largest proportion of
respondents that do not shop around and rather
simply go with their existing banking provider (14%).
The research suggests the level of mortgage
stress experienced in these south eastern states is
considerably less than the level of mortgage stress
suffered in all other regions around the country. On
average, 25% of respondents nationally consider
themselves to be under mortgage stress however only
15% of Vic/Tas mortgage holders consider themselves
to be under mortgage stress.



                                                                                                                  29
            barometer




This is an interesting finding considering 2.4% of Vic/   Figure	7.2.2	–	How	many	more	0.25%	interest	
Tas respondents claim they are not able to meet their     rate	rises	could	you	sustain	before	you	would	
mortgage repayments on their current household            be	unable	to	pay	your	mortgage	on	your	current	
income, in line with the national average (2.5%).         household’s	income?	(Vic/Tas	vs.	National)
Further, should interest rates increase by 0.25% some          %
7.3% of Victorians and Tasmanians claim they will be      15
unable to meet their repayments – a greater proportion                                                                   12
than NSW/ACT (6.5%) and yet 25% of NSW/ACT                                           11
respondents claim they are experiencing mortgage          10
                                                                                                                 8
stress.
This is probably due to a combination of lower cost        5
                                                                              5
of living in Vic/Tas compared to NSW/ACT, and lower
                                                                     2                                   2
debt levels; the average amount borrowed to purchase
property by respondents in Vic/Tas is just $345,534 –      0
around $50,000 less than respondents in NSW/ACT                           Vic/Tas                             National
($406,659).                                                    I’m unable to pay my mortgage on my current household income
                                                               One
7.3 Deposit savings                                            Two

Similar to national averages most Vic/Tas respondents
say they are sourcing their deposit from savings (64%)
and the remainder primarily from equity (26%) or the
sale of an existing property (24%).
On average, respondents from these states expect to
need at least 22% of the house purchase price as a
deposit.
Online, high interest savings accounts are used by 40%
of Vic/Tas respondents to save and store their deposit,
significantly more popular than traditional regular
savings accounts (30%) and term deposits (14%).
Higher risk and return investments such as those in the
share market (6%) and managed funds (4%) are again
less popular.
More than 12% of Vic/Tas respondents say they
were able to save their deposit in less than one year,
the same as the national average (12%). However
only 15% indicate their deposit took two years to
accumulate, lower than for the total sample (21%). At
least 82% of these respondents were able to save their
deposit in no more than five years with the average
timeframe 4.1 years.

30
7.4 Intention                                               Figure	7.4.1	–	Are	you	intending	to	buy	property/	
                                                            another	property	in	the	next	five	years?		   	
Given that the research suggests Vic/Tas respondents
                                                            (Vic/Tas	vs.	National)
are under less mortgage stress than other regions
and save their deposit faster, it is interesting that the
                                                                 %
appetite for purchasing property in the near term is        40
not higher.
                                                                                             30
Some 70% of respondents in Vic/Tas say they                 30
                                                                                                                         26   26
intend to purchase property in the next five years                           21         22
(compared to 74% nationally) however the proportion         20                    19
                                                                                                              18    19

of investment properties being purchased is above that
of all other regions.                                       10
                                                                     5                              5     6
Overall 29% of Vic/Tas respondents say they are                          3
looking to purchase property in the next 12 months           0
with 48% planning to do so in the next two years.                            Vic/Tas                          National

As mentioned, this region has a typical proportion               Yes, within the next 3 months    Yes, within the next 6 months
of property investors however interestingly there is             Yes, within the next 12 months   Yes, within the next 2 years
a higher than average proportion of respondents                  Yes, within the next 5 years     No
intending to purchase new properties over the next
five years as investment properties (44% vs. 38%),
suggesting the market for property investors in these
states could be set to grow.
Respondents from Vic/Tas have a low preference for
existing houses relative to other states (only 64%)
however still considerably more than other dwelling
types. The next most popular are new housing
developments (35%) followed by existing townhouses
(30%) – the nation’s most popular dwelling – (30%) and
existing units (23%).
Victorian and Tasmanian respondents show the
highest preference for the inner city (33%) and the
lowest preference for the outer suburbs (also 33%).




                                                                                                                                   31
            barometer




7.5 Sentiment                                              Figure	7.5.1	–	Comparing	the	coming	year	(2011)	
                                                           to	the	previous	year	(2010),	do	you	think	residential	
Respondents in the Vic/Tas view property as
                                                           property	prices	will	be	higher	or	lower?		
expensive, yet nationally, they are the most optimistic
                                                           (Vic/Tas	vs.	National)
about prices in 2011.
Three in four respondents (74%) believe residential             %
                                                           50
property prices are somewhat (55%) or significantly                               45

(19%) overvalued. But despite this, they are expecting     40                                                         37
more price increases from the property market than                           31
                                                                                                                 33
any other region.                                          30
                                                                                                            23
Half of Vic/Tas respondents believe residential property   20
prices will be higher in 2011, a considerably greater                   15

proportion than the 39% of respondents who believe         10
the same nationally. Conversely they also have the                  2                    3    3        3                    2    3

smallest proportion of respondents that believe a           0
downturn is on the cards with only 17% expecting                             Vic/Tas                             National
lower prices (25% nationally).
                                                                Much lower this year                 Somewhat lower this year
Interestingly, despite this above average optimism, the         Neither lower nor higher this year   Somewhat higher this year
intention of respondents to purchase property in the            Much higher this year                Don’t know

near term is relatively soft in these states.
Only 25% of Vic/Tas respondents believe that the
next six months represents the best time to purchase
residential property and only 57% agree that property
prices will increase strongly in the next three years –
both of which are below the national averages.
These respondents are also the least likely to agree it
is better to get into the property market now than to
wait and save a bigger deposit, suggesting a more
conservative attitude.




32
8.0 Queensland
8.1 General                                              Figure	8.2.1	–	Do	you	consider	yourself	to	be	under	
                                                         mortgage	stress?	(Qld	vs.	National)
Qld has the highest proportion of owner occupier
respondents in the country at 71%. Conversely                  %
Qld has the lowest proportion of property investor       100
respondents (14%) and a below average proportion of
first home buyer respondents (14%).                                                                        75
                                                          75                    72

The high proportion of owner occupiers in Qld relative
to other states suggests that Queenslanders, more         50
than any other state, may have a large chunk of their                28
wealth tied up within the family home.                                                     25
                                                          25

Given the recent natural disasters, this could mean
many affected Queenslanders have seen their personal       0
                                                                          Qld                   National
wealth diminished considerably.
                                                               Yes   No
8.2 Mortgages
Of those respondents who say they currently have
a mortgage or are looking to borrow to purchase
property in the future, 81% shopped around for their
mortgage provider or intend to do so. They primarily
engage the services of a mortgage broker (47%),
the second highest use of brokers behind SA/NT.
Queenslanders are also the second least likely to
conduct their own research (31%), compared to the
national average of 35%.
Almost 28% of Qld respondents with a mortgage
report they are experiencing mortgage stress. While
only 2% of Qld respondents indicate that they cannot
meet their mortgage repayments on their current
household income, 15% say they could not sustain
another 0.25% rate rise and should rates rise an
additional 0.50% more than 24% say they would be
unable to meet their mortgage repayments, which is
slightly above the average (23%).
These respondents exhibit the lowest intention to
pay off their mortgage without selling the underlying
property (58%) and only 39% consider their main
residence an investment to help fund retirement. This
suggests a more transient population who potentially
look to buy and sell a number of properties throughout
their lives.
The high proportion of owner occupiers, low
proportion of property investors and low intention
                                                                                                                33
            barometer




to repay their mortgage in full may suggest that             Figure	8.2.2	–	How	many	more	0.25%	interest	
Queenslanders have a large proportion of their wealth        rate	rises	could	you	sustain	before	you	would	
tied up in their main residence.                             be	unable	to	pay	your	mortgage	on	your	current	
                                                             household’s	income?	(Qld	vs.	National)
It is therefore perhaps no surprise that Queenslanders
have the strongest intent amongst all respondents to              %
borrow against property to invest in a business venture      15
in the future (22%), which includes the largest proportion                      13
                                                                                                                            12
who indicate they are very likely to do so (8%).
                                                                                        10
                                                             10
The proportion of Qld respondents who have done                                                                     8
this in the past is in line with the national average for
respondents (12% and 11% respectively).                       5
In addition to this, Qld respondents also place                         2                                   2
the highest importance of any region on a redraw
facility when selecting their mortgage and are                0
                                                                               Qld                               National
the only respondents to prefer this over an offset
account. In fact, so important are redraw facilities              I’m unable to pay my mortgage on my current household income
                                                                  One
to Queenslanders that while respondents in all                    Two
other states rank redraw facilities in fifth place,
Queenslanders place it equal third.

8.3 Deposit savings
The research suggests that Queenslanders tend to
rely more on Government grants and less on their own
savings when sourcing a deposit than respondents in
other state groups.
Only 60% of Qld respondents say they sourced their
deposit from savings, the smallest proportion of
respondents from the state groups and conversely
some 15% used Government grants representing the
largest proportion to do so of the respondents from
the state groups.
Regular savings account is the cash storage vehicle
of choice for Qld respondents (37%), well above
the national average for all respondents (30%). The
use of online saving accounts appears to have had
slower take-up amongst Queenslanders compared
with the rest of the country (30%), well below the
national average amongst all respondents of 39%. The
research suggests that there may be an opportunity
for a provider to market a high interest online savings
account to the Qld population.

34
Nationally, 81% of respondents say they were able         Figure	8.4.1	–	Are	you	intending	to	buy	property/	
to save their deposit in five years. Of the state         another	property	in	the	next	five	years?		   	
groups, Qld respondents had the highest proportion        (Qld	vs.	National)
of mortgage holders that were able to save their
deposit in this timeframe (88%). This further suggests         %
                                                          40
Queenslanders have a desire to build their wealth
through property.                                                                          31
                                                          30
                                                                                      25                               26   26
8.4 Intention
                                                          20                    18                          18    19
The recent natural disasters may help explain why Qld                      16
respondents have the lowest intention to buy property
                                                          10
in the next five years. While across the nation around             5   5                          5     6
74% of respondents over the age of 18 intend to
purchase property in the next five years, only 69% of      0
Qld respondents share this intention.                                        Qld                            National

Some 26% of Qld respondents say they are intending             Yes, within the next 3 months    Yes, within the next 6 months
to purchase property in the next 12 months, including          Yes, within the next 12 months   Yes, within the next 2 years
10% who are intending to do so in the next six                 Yes, within the next 5 years     No

months. Just under 36% of Qld respondents are
looking at a timeframe of between one and two years,
which is in line with the national trend (38%).
While 89% of those looking to buy property are
planning to borrow to fund their purchase, the
propensity to borrow is slightly below the national
average of 91% and the lowest among the state
groups of respondents.
The research suggests the low appetite for property
investment amongst Qld respondents is likely to
continue with only 25% of those intending to purchase
property doing so for investment purposes, well below
the national average of 38%.
Qld respondents are primarily looking for houses and
more so than respondents in any other region with
76% considering purchasing an existing house and
35% a new housing development.
Along with those respondents from NSW/ACT,
Queenslanders are the only other state group whose
preference for purchasing property in the outer
suburbs (47%) outweighs purchasing in the city fringe
(43%) and conversely, they are the least likely to be
considering purchasing in the inner city (18%) and
surprisingly, given the strong farming community, rural
areas (8%).                                                                                                                      35
            barometer




8.5 Sentiment                                               Figure	8.5.1	–	Comparing	the	coming	year	(2011)	
                                                            to	the	previous	year	(2010),	do	you	think	residential	
Sentiment towards the property market is considerably
                                                            property	prices	will	be	higher	or	lower?		
low among Queenslanders and only marginally better
                                                            (Qld	vs.	National)
than amongst Western Australians. This may be an
indication of the devastation caused by the recent               %
floods and Cyclone Yasi.                                    50

Around 34% of Qld respondents believe residential           40                37                                       37
property prices will be lower in 2011 compared to                                                                 33
                                                                         29
2010, while nationally less than 26% of all respondents     30
                                                                                   25                        23
believe prices will decline. Some 37% of Qld
respondents anticipate no change year-on-year and           20
26% believe prices will rise. The pessimism amongst
                                                            10
Queenslanders is evident when you compare this to                    5
                                                                                               3        3                         3
                                                                                          1                                  2
the nation, where 29% expect prices to rise and 56%          0
agree that property prices will rise strongly in the next                       Qld                               National
three years.
                                                                 Much lower this year                 Somewhat lower this year
Qld respondents say they are the least likely to
                                                                 Neither lower nor higher this year   Somewhat higher this year
consider an interest-only loan in order to purchase a            Much higher this year                Don’t know
more expensive property with only 30% agreeing this
is a consideration compared to 37% nationally.
Interestingly given the recent devastation, 56% of
Qld respondents still believe that property prices are
overvalued. This is, however, relatively low compared
to the national sample (63%).
There could be a change in sentiment in the Qld
market over the coming months as the market adjusts
for the impact of the natural disasters.
Given the strong belief amongst Queenslanders
that property prices will decline in 2011 and the fact
that compared to the other state groups, Qld has
the least number of people who perceive prices to
be overvalued, it comes as no surprise that 29% of
respondents from Qld think the next six months will be
the best time to purchase residential property.
The survey results indicate the cost associated with
rebuilding following the recent disasters may limit the
number actually intending to buy over this timeframe to
just 10%.




36
9.0 Western Australia
9.1 General                                                  Figure	9.2.1	–	Do	you	consider	yourself	to	be	under	
                                                             mortgage	stress?	(WA	vs.	National)
The respondents in WA are typical of the respondents
in the broader nation with 67% classified as owner                 %
occupiers with a mortgage, 19% as property investors         100
and the remaining 14% as first home buyers.
                                                                                                                              75
Just below 73% of WA respondents say they currently           75                       70
have a mortgage, a slightly larger proportion than the
nation as a whole (71%).                                      50

WA is the only state (besides Qld) that has                                30
                                                                                                              25
respondents house prices will be lower in 2011 than in        25

2010 and further, has the least number of respondents
who perceive prices to be overvalued. This suggests            0
                                                                                  WA                               National
that WA respondents expect downwards pressure on
the housing market in the near term.                               Yes       No

9.2 Mortgages
Eighty one percent of WA respondents, including those
                                                             Figure	9.2.2	–	How	many	more	0.25%	interest	
who do not currently have a mortgage but are looking
                                                             rate	rises	could	you	sustain	before	you	would	
to borrow to purchase property in the future, say they
                                                             be	unable	to	pay	your	mortgage	on	your	current	
shopped around for their mortgage provider or intend
                                                             household’s	income?	(WA	vs.	National)
to do so.
Mortgage brokers (40%) are the most popular                   20
                                                                   %
method of shopping around for mortgages in WA and
respondents have the highest propensity to conduct
their own research (37%) second only to respondents           15
                                                                                         15
in VIC/Tas.
                                                                                                                               12
Interestingly WA respondents rate a low deposit
requirement almost equal with the associated fees             10
                                                                                  8                                   8
when selecting a mortgage. Fees are still the second
most important factor (rating 6.4 out of ten, in line with
the national ratings) however fees rated only marginally       5
                                                                         3
ahead of a low deposit option (6.2 out of 10).                                                               2

WA, along with SA/NT, has the highest proportion of            0
respondents who say they are experiencing mortgage                                WA                               National
stress. Around 30% of WA respondents who have a
mortgage consider themselves to be under mortgage                  I’m unable to pay my mortgage on my current household income
                                                                   One
stress, well above the national average of 25%. Some               Two
3% say they are not able to meet their mortgage
repayments on their current household income.



                                                                                                                                    37
           barometer




In the event of a 0.25% rate rise, 11% of WA mortgage     Figure	9.4.1	–	Are	you	intending	to	buy	property/	
holders say they would be unable to meet repayment        another	property	in	the	next	five	years?		   	
commitments and some 27% would be unable to do            (WA	vs.	National)
so should rates rise by 0.50% - a concern given the
expected future rising interest rate environment.              %
                                                          40

9.3 Deposit savings
                                                          30                               27
The mining boom experienced in WA has likely                                    23    23
                                                                                                                       26   26

contributed to the fact that respondents in WA are the                                                            19
                                                          20                                                18
fastest deposit savers compared with respondents in                        16
other state groups.
                                                          10           7                                6
The average time taken by these residents is 3.7 years             4                              5
and more than 15% were able to save their deposit
                                                           0
in less than one year, noticeably above the national
                                                                             WA                             National
average (12%).
Most WA respondents source their deposit from                  Yes, within the next 3 months    Yes, within the next 6 months
                                                               Yes, within the next 12 months   Yes, within the next 2 years
savings (66%) with equity (26%) and sale of an existing
                                                               Yes, within the next 5 years     No
property (21%) and Government assistance (10%) the
only other notable sources. On average they expect to
need at least 19.8% of the house purchase price as a
deposit.
Online, high interest savings accounts are used by
44% of WA respondents to save and store their
deposit, the largest proportion among the state groups
and well above the national average for these products
(39%).
Regular savings accounts are still used by around
30% of WA respondents however there was little
differentiation between the other options with use of
term deposits equal to investments in the share market
(both 8%).

9.4 Intention
Some 73% of WA respondents say they intend to
purchase property in the next five years compared to
the national average (74%).
Of the WA respondents, 27% say they are looking to
purchase property in the next 12 months and 50%
in the next two years which is on par with national
averages.


38
The appetite for investment properties is typical in        Figure	9.5.1	–	Comparing	the	coming	year	(2011)	
WA with just under 39% of respondents intending to          to	the	previous	year	(2010),	do	you	think	residential	
purchase property for investment purposes, similar to       property	prices	will	be	higher	or	lower?		
the overall sample of respondents at 38%.                   (WA	vs.	National)
However, interest in new housing developments is                 %
highest amongst WA respondents (55%). While this            50
type of dwelling is still second to existing houses
(65%) the gap is relatively small, perhaps a reflection     40                                                         37
                                                                         33                                       33
of the wealth generated by the mining boom and the                            31
                                                                                   29
                                                            30
increased demand for new dwellings as a result of the                                                        23
growing population.                                         20
Almost 46% of WA respondents say they are looking
                                                            10
at buying property in the city fringe for their purchase,            4                                  3                         3
                                                                                               2                             2
40% the outer city suburbs and 28% the inner city.           0
                                                                                          1

                                                                                WA                                National
9.5 Sentiment
The sentiment towards property in WA is much                     Much lower this year                 Somewhat lower this year
                                                                 Neither lower nor higher this year   Somewhat higher this year
lower than in the rest of the nation and fewer WA                Much higher this year                Don’t know
respondents see property as being overvalued.
Aside from disaster-ravaged Qld, WA is the only other
state group to have a bigger proportion of respondents
expecting lower property prices (37%) in 2011 than
those expecting higher prices (30%).
Respondents in Australia’s largest state geographically
are also the least likely to consider current residential
prices to be overvalued (52%), well below the national
average of 63%.
Thirty three percent of WA respondents say the next
six months represents the best time to purchase
residential property – more than any other region.
Despite this, the stated intention to buy is in line with
the national average, so while 33% of WA respondents
believe the next six months is the best time to
purchase property, only 10% are actually planning to
do so within this timeframe.




                                                                                                                                      39
           barometer



10.0 South Australia & Northern Territory
10.1 General                                              Figure	10.2.1	–	Do	you	consider	yourself	to	be	
                                                          under	mortgage	stress?	(NT/SA	vs.	National)
SA/NT have the smallest proportion of first home buyer
respondents in the nation. Nationally approximately             %
15% of respondents are first home buyers with as          100
many as 18% seen in NSW/ACT, however less than
                                                                                                            75
12% of SA/NT respondents can be classified as first        75                      70
home buyers.
The number of owner occupier respondents with a            50
mortgage is on par with the national average at 66%                   30
                                                                                            25
and SA/NT has a slightly above average proportion of       25
property investor respondents (22%).
This state also has the largest proportion of               0
                                                                           NT/SA                 National
mortgage holders of all the state groups with 75% of
respondents currently having a mortgage.                        Yes   No


10.2 Mortgages
NT and South Australian respondents are the most
likely to use a mortgage broker (52%), considerably
more than the nation as a whole (43%) and they
are conversely the least likely to shop around for
mortgages using their own research (27% vs. 35%
nationally).
Like the other state groups, only a few SA/NT
respondents choose to just go with their existing bank
(10% compared to 12% nationally).
Top of mind for SA/NT respondents when selecting
a mortgage is interest rates followed by fees.
Interestingly SA/NT respondents place the least
importance on the option to split between fixed and
variable rates and redraw facilities.
Levels of mortgage stress (self-reported) in these
states are the highest in the country at more than
30%.
This is somewhat supported by 4% of respondents
claiming they are currently not able to meet their
mortgage repayments on their current household
income, the most of any region.
Further, 15% say they would be unable to meet their
repayments should a 0.25% rate rise occur and 29%
say they would not be able to sustain a 0.50% rate rise
40
- the lowest ability to tolerate future interest rate rises   Figure	10.2.2	–	How	many	more	0.25%	interest	
in the country.                                               rate	rises	could	you	sustain	before	you	would	
                                                              be	unable	to	pay	your	mortgage	on	your	current	
10.3 Deposit savings                                          household’s	income?	(NT/SA	vs.	National)
Similar to national averages, most SA/NT respondents               %
are sourcing their deposit from savings (63%), the            15                         14
remainder primarily from equity (27%) or the sale of
                                                                                                                             12
an existing property (20%). On average they expect to                            11
need at least 20% of the house purchase price as a            10
                                                                                                                     8
deposit.
Online, high interest savings accounts are used by
                                                               5
34% of SA/NT respondents to save and store their                         3
deposit, equal to the use of regular savings accounts.                                                       2

Much like Qld, high interest online savings accounts           0
                                                                              NT/SA                               National
have made slow progress in the SA/NT marketplace
presenting an opportunity for a provider to capture this           I’m unable to pay my mortgage on my current household income
market.                                                            One
                                                                   Two
Interestingly, term deposits still appear to have a
pulse in the central states with some 18% of SA/NT
respondents using them to store their deposit, the
largest proportional use of these products nationally
and considerably higher than the national average
(13%).
Around 14% of SA/NT respondents say they were able
to save their deposit in less than one year, in line with
the national average of 12%. Interestingly, however,
close to 32% indicated their deposit took two to three
years to accumulate which is below the total sample
(40%) suggesting some polarity within the states in
terms of the ability to save a deposit within a short time
period.
Close to three quarters (73%) of these respondents
say they were able to save their deposit within five
years with the average time taken of 4.7 years, making
these residents the slowest deposit savers in the
country, behind NSW/ACT who average 4.3 years.




                                                                                                                                  41
            barometer




10.4 Intention                                            Figure	10.4.1	–	Are	you	intending	to	buy	property	/	
                                                          another	property	in	the	next	five	years?		
The intention to purchase property among SA/NT
                                                          (NT/SA	vs.	National)
respondents is in line with the national average, with
75% intending to purchase property in the next five            %
years compared to the overall average of 74%.             40

Of the SA/NT respondents looking to purchase                                           29
                                                          30
property in the next five years, 27% are looking to                                          25                            26   26
make this purchase within the next 12 months and
                                                                                                                      19
46% within the next two years, both slightly above        20                18   18                             18

the national average. Thirty seven percent of SA/
NT respondents intend to purchase property for            10           8
                                                                                                      5     6
investment purposes.                                               2
While SA/NT respondents, much like all respondents,        0
predominantly seek to buy existing houses (69%),                            NT/SA                               National
these buyers also show the second greatest interest of
                                                               Yes, within the next 3 months        Yes, within the next 6 months
the state groups in new housing developments (47%).
                                                               Yes, within the next 12 months       Yes, within the next 2 years
Aside from existing townhouses (18%) there is little           Yes, within the next 5 years         No
interest in other dwelling types.

10.5 Sentiment
The sentiment towards property in SA/NT is higher than    Figure	10.5.1	–	Comparing	the	coming	year	(2011)	
the national average and the proportion that believes     to	the	previous	year	(2010),	do	you	think	residential	
the property market is overvalued is relatively low.      property	prices	will	be	higher	or	lower?		
                                                          (NT/SA	vs.	National)
At least 45% of SA/NT respondents believe residential
property prices will be higher in 2011, compared to            %
just 39% nationally.                                      50
                                                                                 43
Only 54% of SA/NT respondents view property as            40                                                          37
expensive. Only 43% believe residential property                            31
                                                                                                                33
prices are somewhat overvalued and 11% say they           30
                                                                                                           23
are significantly overvalued, which is relatively low                  22

compared to the national average of 63%.                  20

While 73% of SA/NT respondents agree that it is better    10
to get into the property market now than to wait and               1                    2    2        3                     2       3

save a bigger deposit, only 22% believe the next six       0
months will be the best time to purchase residential                        NT/SA                               National
property, noticeably below the national average of 26%.
                                                               Much lower this year                 Somewhat lower this year
Looking at the next 12 months, SA/NT also falls                Neither lower nor higher this year   Somewhat higher this year
just behind the average with only 35% of SA/NT                 Much higher this year                Don’t know

respondents viewing this year as the best timeframe
compared to 38% nationally.

42
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