Westpac Home Ownership Report
AUGUST 2013
Introduction
3
Sample Profile
5
KEY FINDINGS
8
Home Ownership No. 1 Priority
9
Lack of Understanding
12
Home Loaners and Overpayments
17
Australian Home Ownership Snapshot
19
Sweeney Research is accredited under the International Standard, ISO 20252.
All aspects of this study have been completed in accordance with the requirements of that scheme.
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Introduction
Methodology
Methodology
Sample
• 5,149 interviews to size home loan market
• 1,594 online interviews with people in the home
loan market across Australia
− 1,057 home loan holders who are owner
occupiers
− 537 with the intention to buy in the next 12
months
Sample
Source
• Research Now Online Panel
Data
Collection
• Conducted between 15th and 23rd July 2013
• Average survey length of 13 minutes
Quotas
• Quotas set for age, gender and state
Weighting
• Sample weighted according to census data
provided by the Australian Bureau of Statistics
• Variables used for weighting as follows…
− Age
− Gender
− State
− Living Situation
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Sample Profile
Sample Profile
Age (%)
18-24 years
3
6
25-34 years
15
16
22
35-44 years
45-54 years
55-64 years
65 years or older
41
30
31
2
6
7
8
12
12
14
Gender (%)
24
23
27
Family Status (%)
Adult living with my parents
Share a home with other adults
(not partner)
48%
48%
52%
52%
52%
4
18
6
5
Single, living alone
Single parent with children at
home
Living with partner – children at
home
Living with partner – no children
at home
48%
12
13
12
13
xx
Home Loan
Holders &
Intending to Buy
xx2
xx3
Home Loan
Holders
Intending
to Buy
4
4
3
43
26
48
31
31
30
Base: All home loan holders: n=1,057, All those intending to buy: n=537
S2. S3. S5. S6.
All values in percentages (%); weighted data
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Sample Profile (cont.)
Location (%)
Location Breakdown By
State(%)
1
1
1
19
21
10
11
8
Home
Loan
Home Intendin
Holders & Loan
g to
Intending Holders Buy
to Buy
19
7
8
30
7
30
4
30
4
4
22
21
5
25
6
4
xx
Home Loan
Holders &
Intending to
Buy
xx2
NSW
30
30
30
QLD
19
19
21
VIC
22
21
25
SA
7
8
7
WA
10
11
8
TAS
5
6
4
NT
1
1
1
ACT
4
4
4
xx3
Home Loan
Holders
Base: All home loan holders: n=1,057, All those intending to buy: n=537
S4. D1.
All values in percentages (%); weighted data
Intending
to Buy
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KEY FINDINGS
Home Ownership No. 1 Priority
The ‘Great Australian Dream’ is alive and well
‘Owning a home’ (32%) or ‘paying off a home sooner’ (25%) is a top priority for 57% of Australians with a home loan or planning
to buy within the next twelve months. This compared to only 8% of respondents ranking having children as their top priority,
ahead of 5% who said getting married.
Top Priorities in Lifetime (%)
Own my own home
27
32
49
25
Pay off my home loan sooner
32
3
10
10
11
Travel the world
8
Have children*
7
11
7
8
7
6
7
Put more savings into a savings account
Put more into my retirement savings/superannuation fund
Total
Home Loan
Holders &
Intending to Buy
3
Own an investment property/pay off my investment
property mortgage
Get married*
Start a business
Own a car/pay off my car loan
None of these
5
6
5
5
4
6
3
2
7
1
1
2
2
2
1
Base: All Home Loan Holders: n=1,057; All those with the intention to buy: n=537
Q1. Q2.
All values in percentages (%); weighted data; *items based on those without children and those not married,
respectively
Home Loan Holders
Home Loan
Holders
Intending to Buy
Intending
to Buy
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Perceived meaning of home ownership is ownership outright
The majority (77%) of people surveyed believe that the true meaning of 'Home Ownership' is achieved only when their home
loan has been paid off in full, as opposed to when they first purchase a property and arrange for a loan
Agreement with “I won’t own my house until I have fully
paid off my mortgage”(%)
Home Loan
Holders &
Intending to Buy
33
Strongly agree/
Agree (%)
44
34
14
45
13
7
2
77
6
2
79
8
1
72
Home Loan
Holders
28
44
19
Intending
to Buy
Strongly agree
Agree
Neither agree nor disagree
Base: All Home Loan Holders: n=1,057; All those with the intention to buy: n=537
Q3.
All values in percentages (%); weighted data
Disagree
Strongly disagree
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Lack of Understanding
Offset Accounts the most popular home loan feature
Offset accounts are the most popular home loan feature amongst home loan holders at 37%.
Current and Preferred Features of a Home Loan when Taking One Out (%)
36
37
34
Offset account
18
18
16
Home equity loan/line of credit mortgage
HLHome
+ intending
to
Loan
buyHolders &
15
Transactional account or all-in-one loan
Intending to Buy
12
26
8
Honeymoon rate
3
Home Loan Holder
23
Home Loan
Holders
5
4
Reverse mortgage or equity release
8
3
Shared equity
Intending to buy
2
Intending
to Buy
8
23
Not sure
19
35
18
None of these
23
3
Base All Home Loan Holders: n=1,057; All those with the intention to buy: n=537
Q9. Q10.
All values in percentages (%); weighted data
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Lack of understanding of what an offset account is
More than one third (36%) of home loan holders and intending buyers don’t understand what an offset account is.
Understanding of an Offset Account (%)
Home Loan
Holders
Correct
64
Incorrect
36
Correct description: An everyday banking account linked to your home loan where every
dollar reduces, by the same amount, the home loan balance on which interest is charged
Base: All Home Loan Holders: n=1,057; All those with the intention to buy: n=537
Q34. (Respondents presented with several descriptions of an offset account and asked to select correct
description)
All values in percentages (%); weighted data
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Choice of loan structure
A degree of uncertainty exists for those intending to buy about the ‘right’ type of home loan for them, with 1 in 5 (20%) not
knowing what type of loan structure they should take up.
Preferred Type of Home Loan (%)
20
27
Intending
to Buy
29
24
Base: All Home Loan Holders: n=1,057; All those with the intention to buy: n=537
Q4 (respondents presented with various descriptions of a variable rate home loan and asked to select 23418
correct– Westpac Home Ownership Research
response). Q7. Q8.
All values in percentages (%); weighted data
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Understanding of what a Variable Rates Home Loan Is
For Australians who do already have a home loan, more than 1 in 5 (22%) didn’t understand what a variable rate was.
6
78
7
Home Loan
Holders
9
The interest rate moves up and down for the duration of the loan
A savings account is linked to your mortgage
An everyday banking account linked to your mortgage
None of these
Base: All Home Loan Holders: n=1,057; All those with the intention to buy: n=537
Q4.
All values in percentages (%); weighted data
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Home Loaners and Overpayments
There is never a bad time to overpay on your home loan
Three quarters of home owners (76%) believe now is a good time to make overpayments on their home loan.
Agreement with ‘Now is a Good Time to make
above Minimum Payments on My Home Loan’ (%)
35
Strongly agree
Neither agree nor disagree
Strongly disagree
Base: All Home Loan Holders: n=1,057
Q3. Q26. Q27.
All values in percentages (%); weighted data
41
15
7 3
Agree
Disagree
Home Loan
Holders
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Australian Home Ownership Snapshot
Australian home ownership is relatively high
30% of Australians own their home outright and 34% of Australians have a home loan.
11% of Australians are currently looking to buy and around 1 in 10 (11%) of Australians plan to take out a home loan to buy a
house to live in within the next 12 months.
Home Ownership Status (%)
Home Loan Holders
30
Renters/living with
parents (no intention)
34
11
Renters/living with
parents (with intention to
buy)
Home owners (Own home
outright)
25
Home Ownership (ABS 2011, %)
67
Total Home
Ownership
32
35
Outright
With Home
Loan
Base: All respondents (screener): n=5,149
S7. S8.
All values in percentages (%); weighted data
*Viral V. Acharya, Matthew Richardson, Stijn Van Nieuwerburgh, and Lawrence J. White, Guaranteed to
Fail: Fannie Mae, Freddie Mac, and the Debacle of Mortgage Finance (Princeton: Princeton University
Press, 2011).
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Average Home Loan
Home Loan
Holders &
Intending to Buy
Up to $10,000
Home Loan
Holders
Up to $10,000
18
$10,001 - $50,000
5
$10,001 - $50,000
$50,001 $100,000
6
$50,001 $100,000
$100,001 $150,000
$200,001 $300,000
22
$300,001 $500,000
More than
$500,000
26
7
5
7
9
$150,001 $200,000
10
Average:
$250,000
Up to $10,000
18
$100,001 $150,000
7
$150,001 $200,000
Intending
to Buy
$10,001 - $50,000
3
$50,001 $100,000
2
$100,001 $150,000
2
$150,001 $200,000
10
$200,001 $300,000
21
$200,001 $300,000
$300,001 $500,000
22
$300,001 $500,000
More than
$500,000
7
Average:
$230,000
16
More than
$500,000
8
23
37
9
Average:
$320,000
Base: All Home Loan Holders (excl. ‘Not sure’): n=863; All those with the intention to buy (excl. ‘Not sure’): n=382
Q15.Q16.
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All values in percentages (%); weighted data
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Average Length of Home Loan Term
Home Loan
Holders &
Intending to Buy
Home Loan
Holders
Intending
to Buy
10 years or less
6
10 years or less
4
10 years or less
12
11-15 years
6
11-15 years
4
11-15 years
11
16-20 years
21-25 years
Not sure
3
7
41
26-30 years
Average:
23 years
More than 30 years
Not sure
16-20 years
7
21-25 years
28
26-30 years
More than 30 years
16-20 years
10
21-25 years
29
4
7
Base: All Home Loan Holders: n=1,057; All those with the intention to buy: n=537
Q17.Q18.
All values in percentages (%); weighted data
19
46
26-30 years
Average:
24 years
More than 30 years
Not sure
22
26
Average:
20 years
3
7
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Time and Amount Left on Home Loan
Time Left on Home Loan (%)
Less than 5 years
11
7-10 years
13-16 years
18
13
17-20 years
14
21-24 years
14
25 years or more
Not sure
Base: All Home Loan Holders: n=1,057
Q19.Q20.
All values in percentages (%); weighted data
Average: 16 years
19
11
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Confidence in paying off home loan is high at the start of the term
Confidence amongst Australians in paying off their home loan to full term at the start of the loan is high at 82%.
Confidence in Paying Off Home Loan by Rest of Term (% 8-10)**
100%
90
82
74
70
60
75
74
84
Significantly higher
Significantly lower
60
52
54
64
50%
46
31
25
33
38
43
23
23
13
0%
25 years 21-24
or more years
17-20
years
11-16
years
5-10
years
Remaining home loan term
Less
than 5
years
End of term
Before end of term
5 years early
10 years early
Base: *All Home Loan Holders with at least 15 years left to pay off
home loan: n=557; **All Home Loan Holders: n=1,057
Q21.
All values in percentages (%); weighted data
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Generational Home Ownership
Outright home ownership is highest amongst Baby Boomers (those aged 55+). Home loans are mostly held by Gen X (those
aged 35-54) and Gen Y (those aged 18-34) are most likely to be those intending to buy.
Status by Age (%)
100%
5
6
11
9
27
41
55
74
53
50%
67
48
30
31
23
14
19
19
0%
18-24
years
23
13
25-34
years
Home Loan Holders
Renters/living with parents (with intention to buy)
*NT not shown due to low base size
Base: All respondents (screener): n=5,149
S7. S8.
All values in percentages (%); weighted data
35-44
years
10
11
6
3
45-54
years
55-64
years
1
65+ years
Renters/living with parents (no intention)
Home owners (without a home loan)
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Australia’s ranking in Home Ownership
Australia is ranked the 12th highest country in the world in terms of home ownership.
International Home-ownership Rates (%)*
100%
89
85 83
78 77 76
75 75 73
72 71 70
68 68 68 68 67
61 59 59
57 57 56
54
46
50%
35
Singapore
Spain
Iceland
Belgium
Norway
Portugal
Luxembourg
Ireland
Chile
Italy
Israel
Australia
England
Canada
Sweden
New Zealand
United States
Japan
Finalnd
Czech Republic
France
Netherlands
Austria
Denmark
Germany
Switzerland
0%
*Viral V. Acharya, Matthew Richardson, Stijn Van Nieuwerburgh, and Lawrence J. White, Guaranteed to
Fail: Fannie Mae, Freddie Mac, and the Debacle of Mortgage Finance (Princeton: Princeton University
Press, 2011).
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