More than seven out of 10 Australian property owners are worried about the country falling into a recession this year and only 28% believe that property prices will increase over the period.
This was according to a report commissioned by LocalAgentFinder, which also found that eight in 10 Australian property owners believe homeownership is out of reach for most people and over four out of 10 are personally willing to offer first-home buyers a discount in a property sale.
The LocalAgentFinder Real Estate Sentiment Report found that in response to rising inflation, nearly nine out of 10 said they will be more prudent with their discretionary spending this year, and around seven out of 10 respondents are now thinking twice about taking an overseas trip this year.
Findings also showed that 73% of respondents were concerned that Australia would experience a recession this year and 66% were “a bit stressed” at the prospect of further rate hikes in 2023.
“As we progress in the new year, Australians seem very concerned about the health of the economy, the impact of inflation, and rising interest rates,” said Richard Stevens (pictured above), LocalAgentFinder CEO. “These concerns translate to the property market where a reasonably large cohort believes prices will fall this year, albeit somewhat moderately.”
When it came to views on property prices, 28% of respondents believed residential property prices will rise over the year, 37% expected no change, and 34% said that prices will fall. Younger property owners were more likely to believe house prices will increase this year, while their older counterparts were more likely to believe that prices will drop, the survey found.
Of those expecting prices to fall, 58% expected modest falls of between 1% and 10%, 31% expected falls of 11-25%, and 9% expected falls of greater than 25%.
The majority of the respondents also believed that governments were not doing enough to help first-home buyers (63%) nor were they doing enough to limit foreign investment in the Australian property market (77%). Some 55%, meanwhile, believed governments should incentivise retirees to downsize to help first-home buyers.
Most parents surveyed wanted to help their children achieve their homeownership dreams, Stevens said.
“People appear to want more action from governments around housing affordability, but while the problem persists, most parents are willing to step in to support their children,” he said.
Of those who wanted to help their children buy a home, 28% were willing to gift money as a deposit, 21% were willing to loan money for the same purpose, and 26% were happy to guarantee their child’s loan. Six per cent of the respondents expressed willingness to buy a house outright for their children and 19% who said they wouldn’t be able or willing to help their children attain homeownership.
“It appears that the bank of mum and dad will continue to be a significant force in the economy until the affordability issue subsides or is adequately addressed,” Stevens said.
Of the 1,038 property owners surveyed, 11% were willing to provide a 1% to 4% discount on the asking price for first-home buyers while others were willing to offer a discount of 5% to 9% (10%), 10% (11%) or even 10% or more (10%). The remaining 58%, meanwhile, said they would not take less than the asking price.
“The fact that over four out of 10 property owners in Australia would be willing to offer substantial discounts to first-home buyers points to how prevalent the issue of housing affordability is and just how sympathetic many Australians are to people confronting this challenge,” Stevens said.
All in all, Stevens said the survey findings showed that property owners are concerned about what 2023 has in store with rising interest rates, inflation at record highs, and ongoing geopolitical issues.
“While the survey suggests that property owners possess a degree of fear or concern around what this year may hold, the property market has shown incredible resilience and growth over the long term and it wouldn’t surprise me if activity, and even prices, pick up sooner than some may think,” he said.
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