Barometer 2014
An annual study of the mortgage market and associated insurance in Australia
Prepared by GfK Australia for QBE
Note: DISCLAIMER: The information contained in this publication has been obtained from GfK Australia and does not necessarily represent the views or
opinions of QBE Insurance (Australia) Limited (QBE). 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 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
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QBE Insurance (Australia) Limited ABN 78 003 191 035
Table of Contents
Introduction Executive Summary
Property market sentiment
5
6
7
Chart 1: Housing economic indicators 7
Chart 2: Impact of political uncertainty on buying residential property
8
Chart 3: Perceptions of property price and interest rate changes
9
Chart 4: Perceptions of property market value in 2014
Chart 5: Perceptions of property pricing and affordability
The current mortgage market: expansion 10
11
13
Chart 6: Current and intended LVR 13
Chart 7: Current and intended loan sizes and LVR
14
Chart 8: Reasons for choosing a Big 4 bank over other lenders
15
Chart 9: Reasons for applying for mortgages through a broker versus direct through the lender
16
Is protecting housing assets important?
17
Chart 10: Ability to service mortgage
17
Chart 11: Impact of an interest rate rise on you and your finances
18
Chart 12: Asset insurance
19
Chart 13: Perceived importance of an actual claim rates for home, contents and landlord insurance
19
Chart 14: Offering of insurance by mortgage provider when taking out mortgages
20
Chart 15: Reasons for having insurance with mortgage institution
21
What does the future property market look like?
22
Chart 16: Intended versus actual property type purchases
22
Chart 17: Interest in Sydney property market
23
Chart 18: Interest in Melbourne property market
23
Methodology
Sample profiles
Appendix
25
26
41
5
Introduction
Welcome to the fourth annual QBE Australia
(QBE) report into mortgage and property
market sentiment and behaviour. For the
first time this year’s report will also highlight
consumer attitudes and perceptions towards
bancassurance.
This report has been prepared exclusively for QBE by GfK
Australia, based on a survey of 1,061 Australians. The sample
consists of:
• current mortgage holders (Mortgagors); and
• those intending to buy residential property, either as an
investment or home in the next five years (Intenders).
The survey was developed by GfK Australia in consultation
with QBE and fieldwork was conducted via an online panel
from June 19 to June 26 2014. For more information on the
survey sample, please see the methodology section at the
end of this report. Summary statistics for key subgroups are
also available at the end of the report.
This year the report focuses on some of the topical
influences on market sentiment and, where relevant, yearon-year changes are reported. This year it also looks at
insurance behaviour amongst those who own or intend to
buy property, to help understand the attitude of this majority
group of Australians towards protecting their assets.
The information, views and opinions in this report are based
on research carried out by GfK Australia and the results of
the survey.
6
Barometer 2014
Executive Summary
• Property appetite among respondents remains strong despite lower consumer confidence – A cash rate at half the
20–year average is supporting a strong property appetite, with house prices and loan growth increasing (RBA) and more
Australian adults looking to buy property in the next five years (39% of the sample in 2014 compared to 35% in 2013).
• The next 12 months now less likely to be seen as the right time to buy – Since our last report in 2013, there has been a
significant drop in respondent perceptions that the next 12 months is the best time to buy (36% in 2014 vs. 42% in 2013).
Views appear to be heavily influenced by uncertainty about current market conditions and perceptions of property prices
and interest rates in the next few years.
• The May Federal Budget is delaying market entry – More than half of respondents say they intend to hold off on
buying until they see the impact of the Budget on the economy.
• There is a general expectation interest rates will rise and house prices might stall – More than half (53%) of
respondents believe property prices will continue to rise in 2014, however 43% believe prices will fall (vs. only 28% in 2013).
This may reflect the 39% of respondents who believe interest rates will rise in the second half of 2014 and 7% thinking
they will fall.
• Affordability remains a top of mind concern – More than half (59%) of respondents think property is overvalued despite
improvements in housing affordability over the past three years:
–– 65% worry foreign investment will make property unaffordable.
• First Home Buyer participation is waning – FHB activity is at near record lows as a proportion of all buyers (RBA) and
63% worry they will never be able to afford their own home. This unaffordabliity sentiment also appears to extend to all
buyers, with the majority (81%) of survey respondents believing future generations will find it harder to purchase their
first home.
• Financial stability is still a big selling point for the Big 4 banks – Existing relationships are helping to retain customers
with the majority of Mortgagors still applying for mortgages directly with their financial institution rather than through
a broker.
• Protection against mortgage payments is a low priority for those who need it most – Among respondents, only a
quarter of Mortgagors claim to have mortgage repayment protection insurance, dropping to one in five for those who
have struggled with repayments in the last 12 months.
• Australians are well ahead on repayments – 46% of respondents claim to be ahead and the rate of arrears (1.2%) is at
the lowest rate since 2009 (Fitch).
• Non-insurance remains a substantial issue when it comes to Australian property – Only four in five Mortgagors
surveyed had building insurance, however this does not appear to be a factor of income level. Rather it may be linked to
consumers’ misconceptions about actual property risk, with respondents ranking theft and fire as the highest risk to their
property, although the most common claims are for water damage due to floods or storms.
• Property insurance is undersold at time of purchase – Less than half of Mortgagors recall being offered building
insurance by their financial institution at the point of sale.
• Property type preferences are changing – Last year’s increased interest in new developments from Intenders appears
to have reversed in 2014, with existing dwellings now the property type more strongly considered and that more likely
to be purchased. The conversion from interest to purchase of new developments is less than 50%. There is also a
continuation of the outer suburb creep, with 53% looking to buy in the outer suburbs (compared to 48% in 2013 and
42% in 2012).
7
Property market sentiment
Property appetite remains strong despite lower consumer confidence
Since the release of the Mid-Year Economic and Fiscal Outlook in late 20131 the state of the Australian economy has been a
consistent theme in both political and media dialogue.
This recurrent debate about the economy appears to have had a negative impact on consumer confidence; first quarter
2014 economic indicators show a 10% decrease in consumer sentiment versus a 10% rise seen at the same time last
year (see Chart 1 below). Faltering economic confidence is also reflected in worries about the job market, with consumer
unemployment expectations more than 20% above the 10-year average2.
Chart 1: Housing economic indicators Official cash rate3
HIA housing affordability4
Consumer Sentiment Index5
Time to buy dwelling Index5
Average house price Index6
Average loan size6
^% difference 2013 to 2014 as a percentage of 2013 value
Q1 2012
4.25%
64.8
96.1
120.8
100
$289,600
Q1 2013
3.00%
69.7
110.5
144.5
103.1
$301,100
Q1 2014
2.50%
77.2
99.5
120.7
114.3
$319,300
YEAR ON YEAR CHANGE
(2013 TO 2014)^
-17%
+11%
-10%
-16%
+11%
+6%
Nevertheless a cash rate less than half the 20-year average7 has had a positive impact on the economy, particularly the
housing market. House prices and average loan sizes continue to increase and survey results support this with appetite for
property continuing to grow, with:
• 14.8% of respondents intending to buy property in the next 12 months compared to 13.2% in 2013; and
• two in five (39%) survey respondents citing an intention to buy in the next five years compared to 35% last year.
Mid-year Economic and Fiscal Outlook, Australian Government (2013)
Unemployment expectations continue to trend lower, Macro Business (2014)
3
Interest Rate Decisions 2012 - 2014, Reserve Bank of Australia (2012 - 2014)
4
Commonwealth Bank Affordability Report, Housing Industry Association (2014)
5
Melbourne Institute Survey of Consumer Sentiment, Westpac (2014)
6
House Price Indexes: Eight Capital Cities, Australian Bureau of Statistics, (2014)
7
Interest Rate Decisions - average = 5.14%, June rate 2.5%, Reserve Bank of Australia (1994 - 2014)
1
2
8
Barometer 2014
Speculation about interest rate rises and the impact of the Federal Budget have changed
perceptions of the best time to buy
In 2014 there was a drop in the Housing Industry Association (HIA) Time to Buy Index for the first time in three years, with
confidence falling back to pre-2012 levels. Survey responses mirror this sentiment: with a significant drop in perceptions
that the next 12 months is the best time to buy. Approximately one in three (36%) mortgagors and intenders in 2014 think
the next 12 months is the best time to buy compared to 42% in 2013. Given the proportion of respondents looking to buy
in the next five years has increased (39% compared to 35% in 2013), it appears people may be delaying purchase until they
think the market has improved.
One factor behind this respondents’ in time to buy is uncertainty about the impact of the Federal Budget changes. Three in
five (59%) intending buyers said they would hold off on buying until they see the impact of the Federal Budget, increasing
to almost three quarters among First Home Buyers (see Chart 2). When asked a similar question about the Federal Election
last year, more intending buyers (45%) said the Election would have no impact on their decision to buy, than the number
this year who said the Budget would have no impact on their purchase intention (35%). This suggests that uncertainty as
a result of the 2014 Federal Budget has had a greater impact on property buying intentions of respondents than the
2013 Federal Election.
Chart 2: Impact of political uncertainty on buying residential property
2013 FEDERAL
ELECTION
2014 FEDERAL
BUDGET
Would like to see what happens to
the economy before buying 30/59
30%
18%
Long campaign will effect economy
so wait until after to buy
9%
Wait to see if change of governmnet
before buying
15%
45% NO IMPACT
1st
59%
Election campaign will put interest
rates on hold so wait until after to buy
35% NO IMPACT
Base: Total purchase Intenders 2013 n=680, 2014 n=749, First home buyers 2014 n=167
1 st home buyer
73 %
9
Verbatim comments indicate that views on the best time to buy are heavily influenced by perceptions about property prices
and interest rates. A belief that property prices will rise is linked to a perception that now is the right time to buy. Conversely
a belief in imminent interest rate rises, and the predicted easing in prices as a result, is commonly stated as a reason to wait.
There has also been a significant shift in sentiment on property prices and interest rate changes in 2014. Belief that prices
will fall has almost doubled from 25% to 43%. Opinions are also no longer split on interest rates with a third of respondents
believing interest rates will rise in the second half of 2014 and almost none believing they will fall. This belief is amplified
amongst First Home Buyers, three in five of whom believe rates will rise (Chart 3).
Chart 3: Perceptions of property price and interest rate changes
1st
Total
1 st home buyer
Interest Rates
in Q3/Q4
28%
HIGHER
39%
46%
53%
Interest Rates
in Q3/Q4
30%
60%
Property prices
vs last year
47%
56%
60
50
40
30
20
10
60
50
40
30
20
10
2013 2014
LOWER
Property prices
vs last year
2013 2014
2013 2014
2013 2014
10
20
30
40
10
20
30
40
29%
7%
24%
24%
21%
7%
27%
26%
Base: Total survey sample 2013 n=1,017, 2014 n=1,061; First home buyers 2013 n=115, 2014 n=167
Significant increase on 2013
Significant decrease on 2013
Property prices are perceived to be high and affordability is an increasing concern
“Although most Australians are physically well housed, it can no longer be said that we are, in general, affordably housed.”8
Saul Eslake, Chief Economist of Bank of America Merrill Lynch Australia.
It would appear survey respondents agree with the above statement, with a significant increase in both the number of
respondents who think property prices rose year on year (see Chart 3) and the number who believe property prices are
overvalued (see Chart 4). In fact more than half of Mortgagors and Intenders believe property in Australia is overvalued, with
one in three (31%) believing it is substantially overvalued by more than 10%. Even the RBA has a split opinion about the value
of property; its recent research paper concludes that if the historical rate of appreciation since 1955 (approx. 2.5%) continues
then houses are fairly valued, but if house price growth slows, then the average household is probably financially better off
renting than buying9.
8
9
Australian Housing Policy: 50 Years of Failure, Saul Eslake, (2013)
Is Housing Overvalued?, Reserve Bank of Australia (2014)
10
Barometer 2014
Chart 4: Perceptions of property market value in 2014
Overvalued (>10%)
20%
31%
43%
Somewhat overvalued
(up to 10%)
28%
28%
28%
Somewhat undervalued
(up to 10%)
18%
10%
7%
3%
Undervalued (>10%)
9%
2013
7%
28%
36%
20%
20%
26%
28%
29%
12%
9%
6%
8%
6%
9%
42%
28%
22%
21%
29%
7%
3%
30%
9%
9%
11%
2014
1 st home
buyer
Owneroccupier
Base: Total sample: 2013 n=1,017, 2014 n=1,061; 2014: First Home Buyers n=167, Owner-Occupiers n=533, NSW/ACT n=355, VIC/TAS n=312, QLD n=178, WA n=127, SA/NT n=89
Significant increase on 2013
Significant decrease on 2013
The trend of different property value perceptions across states continued in 2014:
• Respondents residing in NSW/ACT and WA were most likely to rate the market as overvalued (65% and 71% respectively),
with both representing significant increases from 2013 (54% and 53% respectively). These views are likely related to
increased activity in the respective capital cities, with property prices in Sydney and Perth increasing by 20.5% and
9.4% respectively10.
• Conversely a third (32%, down from 44% in 2013) of Queenslanders rate property as undervalued, indicating that the Gold
Coast property slump continues to impact perceptions despite Brisbane recording 4.8% year on year growth.
As property prices continue to increase (prices have risen by 10.6% across state and territory capitals over the year to March
201410), affordability remains a significant concern. The majority (61%) rate property as unaffordable, with more than one in
four stating prices are so high they can’t afford what they want (29%, up from 25% in 2013).
Survey respondents are not confident that affordability will improve: half (47%) believe property will become increasingly
unaffordable, increasing from 41% in 2013. The majority of survey respondents (81%) agree future generations will find it
harder to purchase their first home and a third of property Intenders (35%) fear they’ll never be able to afford their own
home. Indeed the great Australian dream of owning one’s own home appears to be slightly on the decline, with one in seven
(15%) now stating they’re better off renting than owning (increasing from 11% in 2013).
10
RP Data-Rismark March Hedonic Home Value Index Results, RP Data (2014)
11
Influence of foreign investment on property prices is a growing concern
In 2014 there has been significant media interest in the impact of foreign investment on property prices in Australia. Foreign
investment in residential property is certainly perceived as an increasing threat, with two thirds (65%) of Intenders now
concerned foreign investment will make property unaffordable vs. 56% in 2013 (Chart 5).
While foreign investment in Australian property has been increasing (with the latest statistics indicating this investment
reached $17 billion in 2012/2013), it should be noted that foreign investment into residential property is subject to approval by
the Foreign Investment Review Board (FIRB) and is restricted to the purchase of new dwellings.
Analysis of FIRB data by the RBA suggests that foreign investment is largely concentrated in high-density new dwellings
within the inner-city areas of Sydney and Melbourne. Furthermore, the average price point for approved foreign residential
property purchases is approximately $650,000.11 Due to a combination of these factors, it is unlikely that foreign investment
is responsible for much ‘crowding out’ of First Home Buyers whose average price points are significantly lower. It should also
be noted that foreign investment may also be contributing to a stimulation of the construction market, which will assist in
lessening housing-supply issues which continue to persist across most state capitals12.
Chart 5: Perceptions of property pricing and affordability
Disagree
Agree
7%
81%
I'm worried about the debt people are getting into to buy property
12%
70%
I'm worried foreign investment will make property unaffordable
5% 14%
Future generations will find it harder to purchase their first home
65% 9%
I think property prices will increase strongly in the next three years
20%
49%
It’s more important to get into the market now than to save a bigger deposit
4% 20%
48%
I'm worried I’ll never be able to afford my own home
8% 48%
31%
I'd consider an interest only loan to purchase a more expensive property
44%
27%
I am better off owning a home than renting
4% 15%
Base: Total sample, n=1,061
11
12
Significant increase on 2013
Foreign Investment in Residential Real Estate, RBA (2014)
Australian Housing Outlook 2013-2016, BIS Shrapnel (2013)
Significant decrease on 2013
7%
64% 8%
12
Barometer 2014
Affordability remains a particular issue for First Home Buyers and their participation
in the market is waning
According to the latest Australian Bureau of Statistics (ABS) data, First Home Buyer activity is at near record lows,
accounting for only 12.6% of total borrowers in May 2014 – a fall of 2% on the previous year13. Recent changes to First Home
Buyer grants restricting applicability to new dwellings in NSW, QLD (2012) and VIC (2013), have seemingly impacted First
Home Buyers’ ability to enter the property market. It is expected a similar trend will apply in TAS and SA, with the restrictions
extending to these states in July 2014.
Survey results indicate affordability is a perceived barrier for First Home Buyers, with 78% believing property prices are close
to reaching or are above what they can afford, and 63% worrying they’ll never be able to afford their own home (compared
to 31% of all respondents).
13
Number of dwelling commitments, Australian Bureau of Statistics (2014)
An annual study of the mortgage market in Australia
The current mortgage market:
expansion
Loan-to-Value Ratio (LVR) continues to rise
As noted by the RBA in July, loan approvals have risen by around 20% in value in the past year, and this is “certainly
significant”14. In fact the rise in the value of loan approvals is currently close to double the rate of property price increases
(year on year property growth at March 2014 was 10.6% across state and territory capitals15).
Survey results support that LVRs are increasing and likely to remain high – close to the 80% point at which lenders
mortgage insurance (LMI) is usually required (see Chart 6). Note that these are higher compared to actual figures provided
by the Australian Finance Group which reports mortgage LVR figures of approximately 69%16 across all states and territories.
Chart 6: Current and intended LVR
73%
70%
5+ years
ago
n=320
4-5 years
ago
n=79
74%
2-3 years
ago
n=170
80%
last 12
months
n=74
MORTGAGORS
LVR at time of purchase
80%
77%
1-2 years
from now
n=140
3-5 years
from now
n=237
76%
next 12
months
n=226
INTENDERS
Intended maximum LVR
Information provided by respondents on their most recent mortgage or intended next mortgage clearly demonstrates
intended loan sizes are on the increase, particularly for First Home Buyers (Chart 7). The upper range of what Intenders
are willing to borrow is close to $400,000, well above the current average loan size of $319,30017. Loan sizes for those
who bought in the last 12 months are on average $337,000, compared to an average of $215,000 across all existing loans,
which also highlights that loan sizes and LVRs are increasing. It is important to note that lending is still lower than the pace
reached before the Global Financial Crisis (GFC) and the RBA has indicated that borrowing does not appear to be imprudent.
Chart 7: Current and intended loan sizes and LVR
$
All
Mortgagors
1 st home
owners
Amount borrowed
$275,000
$358,000
$303,000
$255,000
Current loan
$215,000
$264,000
$266,000
$201,000
Current LVR*
51%
68%
57%
47%
MORTGAGORS
Investors
Owneroccupiers
INTENDERS
Desired loan
$271,000 $383,000
Desired LVR
54% 79%
All
Intenders
7%
13%
$258,000 $396,000
57% 81%
9%
20%
1 st home
buyers
$283,000 $400,000
55% 82%
Potential
Investors
Base: Mortgagors, n=712; First Home Owners, n=123; Current Investors, n=150; Owner Occupiers, n=533
Significant increase on 2013
Intenders, n=749; First Home Buyers, n=167; Potential Investors, n=316
* Calculated by last 12 month suburb median value for house or apartments as at September 2013, source: RP Data
Economic Update, Reserve Bank of Australia (2014)
RP Data-Rismark March Hedonic Home Value Index Results, RP Data (2014)
16
AFG Mortgage Index, Australian Finance Group (2014)
17
House Price Indexes: Eight Capital Cities, Australian Bureau of Statistics (2014)
14
15
6%
14%
13
14
Barometer 2014
Big 4 lenders continue to benefit as perceived financial security remains more important than
price and lending appetite
Just under three quarters (72%) of all current Mortgagors and Intenders chose, or plan to choose, one of the Big 4 banks
(The Commonwealth Bank, NAB, Westpac and ANZ) as their mortgage provider, which is in line with lending market share
(79%) and up from 58% pre-GFC18. Consumer appetite for the Big 4 lenders is increasing, with 80% of Intenders with a
lender in mind indicating they would go with a Big 4 bank compared to 72% in 2013.
The primary motivation for taking out a mortgage with a Big 4 bank is an existing relationship. One in two (49%)
Mortgagers and Intenders say they chose, or would choose, a Big 4 bank due to an existing relationship, versus one
in three (32%) for other lenders (see Chart 8). Perceived financial security is also a key differentiator between the Big 4
banks and other lenders; two in three (64%) rate the Big 4 banks as financially secure which is a large over-index compared
to other banks, credit unions, building societies and non-bank lenders (see Chart 8).
Chart 8: Reasons for choosing a Big 4 bank over other lenders
‘Big 4’ banks
Other lenders
Existing relationship
49%
49%
Mortgages best suit needs
47%
47%
Better financial security
29%
29%
Better rates
46%
46%
Better reputation
27%
27%
Care more about customers
34%
64%
Base: Have/intend to have mortgage with Big 4 bank, n=591; Have/intend to have mortgage with another lender, n=292
‘Big 4’
banks
Other
banks
Credit unions /
Other
Building Societies lenders
Offer better financial security
Happy to lend large amounts for a mortgage
Happy to lend you more than 80% LVR
Base: Total sample, n=1,061
Interestingly, financial security is particularly important for intending First Home Buyers (46%) and survey respondents
who said they had just bought their first home were most likely of all Mortgagors to have a mortgage with a Big 4 bank
(79% vs. 67% for all Mortgagors). This could be seen as surprising given the higher LVRs amongst Mortgagors who bought
their first home (80% versus 74% for all Mortgagors) and belief amongst all survey respondents that non-Big 4 lenders are
more likely to lend more than an 80% LVR (See Chart 8).
Survey respondents favouring non-Big 4 lenders believe they offer better rates and more suitable products than the
Big 4 banks (46% vs. 24% and 47% vs. 25%, respectively).
Mortgage industry calls on government to encourage securitisation to counter lack of widespread competition in home lending,
Mortgage and Finance Association of Australia (2014)
18
15
Going direct to lenders is still the norm, driven by convenience
Only about a third (37%) of mortgage seekers took up their loan through a mortgage broker and this has not changed since
2013. Investors are slightly more likely to utilise a broker (42%) but age is actually the strongest predictor of mortgage broker
usage, with 42% of those under 45 years of age using a broker versus 28% for over 45s.
The primary motivation for using a mortgage broker remains convenience (see Chart 9), rather than a borrower’s belief
they will get a better deal, suggesting younger people are perhaps happier to outsource the search process. The primary
motivation for getting a mortgage directly through a bank is also convenience, with one in three (39%) respondents
stating they went with their bank because it was easier. Perceived easiness is particularly important to first home owners
(49% of whom indicated they took on a mortgage with their bank directly because it was easier), suggesting there is
greater confidence in the ease of process with main financial institutions amongst those unfamiliar with the mortgage
acquisition process.
Chart 9: Reasons for applying for mortgages through a broker versus direct through the lender
37%
63%
Direct with lender
More convenient
Under 45 years old: 42%
45 years plus: 28%
Through a mortgage broker
40%
More convenient
46%
Going with my bank was easier 39%
Do the research for me
38%
Better deal
Tailored to my needs
37%
26%
Base: All mortgagors and loan intenders n=958; Applied/will apply direct through the lender, n=593, Applied/will apply for
a mortgage through a broker, n=346;
16
Barometer 2014
Is protecting housing
assets important?
Mortgagors are well ahead on payments due to low interest rates
The RBA’s Financial Stability Review in March 2014 found the trend of Australians paying down their mortgage more
quickly than required has continued19. The Fitch Dinkum RMBS Index in March 2014 confirmed only 1.2% of mortgagors
are in arrears with their mortgage payments, the lowest proportion since 200920. So, whilst property prices and loan sizes are
increasing, record low interest rates are relieving the pressure on mortgage repayments.
This finding is reflected in our survey data, with half (46%) of Mortgagors saying they are ahead on their payments and
another third (34%) having no trouble with payments. The RBA states the aggregate mortgage buffer has risen to almost 15%
of outstanding balances, or 24 months of equivalent scheduled repayments at current interest rates. This may help explain
why half (53%) of Mortgagors said losing their job would not be a problem for meeting their mortgage repayments, and
for those who indicated that job loss would affect their ability to pay their mortgage, they thought they could still manage
minimum repayments for an average of six months. In fact only 3% of Mortgagors said job loss would make them unable to
pay their mortgage, the same proportion that mentioned experiencing mortgage strain (Chart 10). As the RBA noted in the
aforementioned review, it appears households have considerable capacity to continue to meet their debt obligations,
even in the event of a spell of reduced income or unemployment.
17
Chart 10: Ability to service mortgage
Progress on mortgage
repayments
last 12 months
Ahead
46%
On track
34%
Struggling
Losing a job would not impact
ability to pay mortgage
53 %
Mortgage has placed you under
financial strain in last 12 months
3%
21 %
Base: Mortgagors, n=712
This lack of mortgage strain may explain the low rate of refinancing (15%) among respondents and why most (71%)
refinancing occurs with the same lender, suggesting rate chasing is not a major goal of existing mortgagors.
19
Financial Stability Review, Reserve Bank of Australia (2014)
Fitch Dinkum RMBS Index, Fitch Ratings (2014)
20
18
Barometer 2014
Protection against mortgage payments a low priority for those who need it most
Given the positive position of most mortgagors in being able to meet or get ahead of their minimum mortgage repayments,
it is not surprising that mortgage repayment protection insurance is owned only by a minority (27%) of respondents.
While more than two thirds of Mortgagors considered mortgage protection insurance, a further 22% did not believe it
was necessary. Price is not a major factor, with only 2% citing expense as a barrier. Protection is also higher amongst
investors, possibly because this can be charged as a business expense, but it is still only 35% amongst this group. However
respondents who have struggled with mortgage payments in the last 12 months are less likely to have protection than those
who are ahead on their repayments (19% vs. 33% have mortgage protection insurance, respectively).
The low incidence of mortgage protection insurance reflects a general optimism about financial security which is at odds
with respondents reporting interest rates rises will have a substantial negative impact on their finances (see Chart 11). Half of
the Mortgagors surveyed (49%) are likely to try to minimise this negative impact by locking in fixed rate loans in the event
that interest rates rise, a significant increase on 2013 figures.
Chart 11: Impact of an interest rate rise on you and your finances
Strength of negative impact of interest rate rise on your finances
24%
Minor
30%
Considerable
28%
Strong
19 %
Mortgagor
44%
22 %
Would you lock in a fixed rate mortgage if
interest rates rose in the next 12 months?
19 %
Definitely
Probably
46%
31 %
Intender
13 %
26%
13 %
36%
2013
2014
1 st home
buyer
Base: Believe interest rated will rise in the second half of 2014
Mortgagors: n=712, intenders n=315, First home buyers n=98
Base: Mortgagors: 2013 n=736, 2014 n=712
Significant increase on 2013
Australian property is underinsured, perhaps due to the misjudgement of likely claims
As discussed in the Australian Securities and Investments Commission (ASIC)’s 2014 regulatory update21, a common
issue emerging from recent natural disasters (QLD floods and Victorian and NSW bushfires) was that consumers both
lack understanding of what their insurance policy covers and have insufficient coverage to rebuild. In 2005 ASIC estimated
that 70% of homes were underinsured and a national survey commissioned by the Insurance Council of Australia (ICA)
in 2013 confirmed more than four in five Australians are risking their homes and other valuable assets by not having
enough insurance22.
Whilst underinsurance is an obvious concern, survey results indicate that non-insurance remains a substantial issue
when it comes to Australian property. Only four in five (82%) Mortgagors have building insurance and this drops to 74%
amongst First Home Owners (see Chart 12). While the level of contents insurance reported in our research is in line with the
findings of the ICA research in 2013, the rate of non-insurance for Mortgagors is substantially higher than the figure of one in
25 homeowners not having building insurance reported by the ICA. This perhaps indicates that Mortgagors are less likely to
have insurance than outright home owners.
21
22
Regulatory update 2014: Insights from the Australian Securities and Investments Commission, Australian Securities and Investments Commission (2014)
Underinsured and overexposed - most Australians risk financial hardship through underinsurance, Insurance Council of Australia (2013)
19
Chart 12: Asset insurance
MORTGAGORS
Other insurer
INTENDERS
Mortgagee
Other insurer
Home
61%
23%
82%
Contents
62%
24%
83%
13%
81%
Comprehensive Car
Landlord’s*
70%
50%
Any home or car insurance
57%
26%
42%
66%
27%
54%
69%
17%
73%
23%
82%
32%
Intended Mortgagee
47%
95%
n/a
70%
83%
41%
Base: Mortgagors who know their mortgage institution n=683, Intenders who have no current mortgage and have a mortgage institution in mind n=154
*Asked only of current investors n=147
Non-insurance is widespread among respondents and is not a factor of income levels, suggesting non-insurance is not
necessarily linked to availability of funds. One possible explanation is misconceptions about insurance claims. Almost
half (45%) of insured respondents have made a claim on their home and contents or landlords insurance, with the most
common claims being for water damage due to storms (30%) or floods (28%). However when asked which insurance
events are most important, water damage ranked well behind fire and theft in importance (See Chart 13), suggesting,
as ASIC inquiries have found, 23 that consumers don’t adequately understand the need for and types of water damage
insurance for their property.
Chart 13: Perceived importance of an actual claim rates for home, contents and landlord insurance
Rated importance
Actual claims
37%
24%
12%
10%
Fire
30%
28%
19%
12%
4%
Theft
Flood
Storm
damage
8%
Falling
tree
4% 7%
4% 6%
Tenant
damage
Vandalism
12%
1%
Broken
glass
Animal
damage
Base: Total sample n=1,061; Have insurance and have made a claim in the last 3 years n=134
23
5%
2%
Getting Home Insurance Right: A Report on Home Building Underinsurance, Australian Securities and Investments Commission (2005)
20
Barometer 2014
Property purchase could be better utilised as a point of sale for insurance
Just over a third (35%) of Mortgagors surveyed recall being offered building insurance at the time of taking out their
mortgage by their financial institution. While Big 4 bank customers indicated that they were more likely to be offered building
insurance at the point of sale, this was still limited to just 40% (see Chart 14).
Chart 14: Offering of insurance by mortgage provider when taking out mortgages
Offered by:
All mortgage providers
35%
Home (Building)
Contents
Car
Big 4 bank mortgagee
24%
27%
17%
21%
37%
41%
Landlord’s*
Life / income protection
40%
26%
Not offered any insurance
Base: Mortgagors n=712; *Asked only of current investors n=147
32%
53%
61%
21
Only 28% of Mortgagors who have building insurance hold it with their mortgage institution. Reasons given for having
insurance with a mortgagee focus on trust and positive customer experiences, whereas the barriers to insuring with a
mortgagee are perceived to be price based (33%) and because respondents like to keep their insurance and banking
separate (27%, see Chart 15). Lack of familiarity with insurance products provided by mortgage institutions is also a barrier to
uptake, and is not surprising given the rate of contact at point of purchase discussed above.
On 1 February 2014, a new banking code came into effect in Australia that enforces lending institutions to contact their
mortgage customers annually to remind them of their obligations to insure their property under the terms and conditions
of their mortgage24. In light of this new requirement it will be interesting to see whether the rate of property insurance
increases in the latter half of 2014 and into 2015.
Chart 15: Reasons for having insurance with mortgage institution
54%
WHY HAVE INSURANCE WITH
MORTGAGE INSTITUTION?
Trust them
30%
Easy to apply
46%
WHY DON’T HAVE INSURANCE
WITH MORTGAGE INSTITUTION?
Pricing uncompetitive
33%
29%
Want to keep banking and
insurance separate
27%
Good past experience
29%
Not familiar with their
insurance products
18%
Want to keep banking and
insurance together
28%
Not experts in insurance
16%
Included or discounted
through mortgage
24%
Not aware they offer insurance
16%
Base: have insurer with current/intended mortgagee n=321, Do not have insurance with current/intended mortgage n=455
24
Revised Banking Code of Practice – 2013, Australian Bankers’ Association Inc (2013)
22
Barometer 2014
What does the future
property market look like?
Property type preferences are changing
In 2013 we saw an increase in interest in new developments amongst property intenders but this appears to have reversed
in 2014. ABS housing statistics reveal that while Owner Occupied housing commitments have increased by 7.5% in the year
to April 2014, the number of commitments for purchase of new dwellings has fallen 11.1%25. Survey results confirm
that existing dwellings are not only more strongly considered by purchase Intenders but they are also far more likely to be
purchased; the conversion from interest to purchase of new developments is less than 50% (see Chart 16).
Chart 16: Intended versus actual property type purchases
37%
18%
Total
44%
18%
NEW DWELLINGS
EXISTING DWELLINGS
Intending to buy Bought
Intending to buy Bought
55%51%
20%
6%
16%
3%
19%
36%
14%
27%
9%
12% 5%
35%
18%
18%
House
8% 0%
5% 3%
53%
44%
9%
19%
Investors
Owner-occupiers
5% 4%
20%
9%
17%
21%
18%
3%
8% 2%
60%56%
First home buyers
$
8% 1%
5%
10% 2%
5% 4%
8%
25%
13%
18%
17% 9%
16%
1%
11%
1%
2%
9% 3%
3%
7% 3%
55%53%
5%
Unit
14%
2%
Townhouse
8% 1%
4% 4%
Terrace /
semi
Land
House
Unit
Townhouse
Terrace /
semi
Base: Intend to buy in the next five years, Total, n=749; First Home Buyers n=167, Investors n=316, Owner-Occupiers n=289
Mortgagors (bought), Total, n=712; First Home Owners n=122, Investors n=148, Owner-Occupiers n=533
Significant decrease on 2013
Changes to First Home Buyer grants appear not to be having the intended impact for this buying group, with First Home
Buyers reporting lower interest in all new property types, and significantly lower interest in new units and townhouses. This
is potentially a result of being priced out of this market or the ‘benefit’ of the current grant is not great enough to generate
interest in new properties.
Outer suburb creep is likely to continue
Compared to 2013, there is little change in the locations where respondents want to buy. Less than 10% want to buy
in another state, and almost three in four (74%) want to buy in capital cities. There is however a continuation of the outer
suburb creep within capital cities, with 53% saying they are looking to buy in the outer suburbs (compared to 48% in 2013
and 42% in 2012).
In the last decade we have seen rapid residential development in inner cities, particularly in Sydney and Melbourne, however
survey respondents reported a drop in interest in Sydney and Melbourne inner city property amongst Intenders in
2014. For those looking to buy in Sydney, the most popular areas are the Inner West (35%), followed by Parramatta (33%) and
the North West (24%). Within Melbourne the most popular areas to buy are in the East: the South East (43%), Inner East (30%)
and East (26%).
25
Housing Finance Statistics, Australian Bureau of Statistics (2014)
23
Chart 17: Interest in Sydney property market
Consideration
Median
house price
Growth
Median
unit price
Growth
$977,952
8%
$665,500
8%
Lower North Shore
$1,505,063
8%
$688,038
8%
Upper North Shore
$1,019,120
6%
$626,167
6%
Northern Beaches
$1,130,350
7%
$642,773
7%
North West
$790,391
8%
$539,174
8%
Outer West
$403,343
7%
$335,667
7%
Parramatta
$564,867
9%
$429,913
9%
South West
$472,227
6%
$306,864
6%
Inner West
$872,373
9%
$525,086
9%
Sutherland Shire
$880,421
5%
$500,308
5%
Eastern Suburbs
$1,936,367
7%
$769,778
7%
$828,628
8%
$512,700
8%
Central Sydney
22%
16%
24%
12%
18%
33%
9%
35%
19%
19%
18%
13%
Southern Suburbs
Prices from RP Data September 2013, growth is 12 month growth
Chart 18: Interest in Melbourne property market
Consideration
North West
13%
North
20%
Inner North
20%
Inner West
Inner East
15%
West
30%
17%
Inner City
14%
Median
house price
Growth
Median
unit price
Growth
Inner City
$829,500
7%
$510,389
7%
Inner East
East
26%
South East
43%
$1,019,500
5%
$545,778
5%
Inner North
$595,830
3%
$436,478
3%
Inner West
$541,053
1%
$365,500
1%
Western Melbourne
$374,075
1%
$274,667
1%
North West
$366,800
2%
$303,667
2%
Northern Melbourne
$455,765
0%
$342,800
0%
Eastern Melbourne
$580,530
5%
$436,563
5%
South East
$555,762
2%
$420,904
2%
Prices from RP Data September 2013, growth is 12 month growth
24
Barometer 2014
Impact of SMSFs
ABS statistics reveal that loans to investors have increased 9% in the last year, compared to only 6% growth for the
traditional property heartland of owner occupiers26. The RBA also reports that increased turnover in the property market has
been driven by investors (35% growth in value of loan approvals27). Survey data confirms an increased interest in investing; of
those looking to buy residential property in the next five years, 46% said they were doing so for an investment (up from 42%
in 2013 and 26% in 2012). The survey identified that 7.6% of Australians aged 18 and over classify themselves as Investors,
while a further 16.8% intend to become investors in 2013, indicating that investor growth is set to continue.
Investment through Self-Managed Superannuation Funds (SMSFs) is also likely to be an increasing factor in the property
market. ATO data reveals more than 1 million Australians are now SMSF members and hold a third, or $547 billion, of the
superannuation market’s value. SMSFs are the fastest-growing segment of the Australian superannuation industry and
property now makes up approximately 16.3% of all invested funds28. However this investment is largely directed at nonresidential property, with domestic residential property accounting for 3.8% of all invested funds.
Survey data reflects the growth in SMSFs, with 19% of survey respondents claiming to have an SMSF versus 15% in 2013. One
sixth (15%) of these already own property as part of their SMSF and two thirds (66%) are open to buying property through
their SMSF.
Housing Finance Australia, Australian Bureau of Statistics (2014)
Box B: The Housing Market, Rserve Bank of Australia (2014)
28
Self-managed Super Fund Statistical Report – March 2014, Australian Taxation Office (2014)
26
27
25
Methodology
The survey upon which this report is based was an online survey targeting Australian adults (aged 18+) who either have a
current residential mortgage or who intend to buy residential property (as an investment or a home) in the next five years.
The survey was developed by GfK Australia in consultation with QBE Australia, and fieldwork was conducted via an online
panel from 19 to 26 June 2014.
Data was weighted to the Australian population according to 2013 population data from the Australian Bureau of Statistics.
Minimum samples of n=500 were set for the two core target sample groups: Mortgagors and Intenders, which were met
through natural fall out of the sample. Of the 1,061 responses collected, 712 were Mortgagors and 749 were Intenders, with
400 qualifying for both. Throughout the report the following subgroups are referred to as follows:
• Mortgagors (have a current residential mortgage)
–– 34.1% of the population,67% of the sample, n=712
• Intenders (intend to buy a residential property in the next five years)
–– 34.9% of the population, 70% of the sample, n=749
• First Home Buyers (house hunters looking for their first home)
–– 8.1% of the population, 16% of the sample, n=167
• Owner-Occupiers (have a mortgage for the home they live in)
–– 26.4% of the population, 50% of the sample, n=533
• Current Investors (currently have a mortgage for an investment property)
–– 7.6% of the population, 14% of the sample, n=150
• Potential Investors (intend to buy an investment property in the next 5 years)
–– 16.2% of the population, 30% of the sample, n=316
• First Home Owners (currently have a mortgage on their first home)
–– 6.3% of the population, 12% of the sample, n=123
The total target group for this survey represents 53.51% of the Australian adult population.
26
Barometer 2014
Sample profiles
27
Total market profile
Property Ownership
Mortgagor, no intention
Mortgagor and intend to buy
No mortgage, intend to buy
Nett Mortgagor
Nett Intender
%
29.6
37.5
32.9
67.1
70.4
When bought / Intend to buy
Last / next 6 months
Last / next 7-12 months
Last / next 13-24 months
Last / next 3-5 years
More than 5 years ago
%
%
Mortgagor Intender
8.4
17.1
3.0
20.0
25.2
22.5
11.3
40.5
52.1
n/a
Subgroup Classification - Mortgagors
First home owner
Owner-occupier only
Investor only
Investor & owner-occupier
Subgroup Classification - Intenders
First Home Buyer
Subsequent home buyer
Investor
%
12.0
40.4
4.8
9.2
%
16.1
47.0
43.4
Property type bought / Intend to buy
Existing house
Existing unit
Other existing property
New house
New unit
Other new development
Land
Mortgagor Intender
50.9
55.1
9.4
19.7
4.8
19.6
18.4
37.1
5.7
19.8
4.5
18.1
4.2
4.8
Sentiment
Best time to buy is next 12 months
Interest rates will rise in second half of 2014*
Interest rates will fall in second half of 2014*
Property prices have risen in 2014*
Property prices have fallen in 2014*
Property is undervalued*
Property is overvalued*
Future generations will find harder to buy
Worry foreign inv. making property unaffordable
I am better off owning a home than renting
Housing price 'bubble' will burst + prices will fall
Worry I’ll never be able to afford my own home
%
35.8
38.9
7.4
53.4
23.5
17.4
58.3
80.6
65.1
63.9
43.0
31.1
Mortgage / Intended mortgage
Avg. property price (max. Intenders)
Avg. loan at purchase (max. Intenders)
Avg. LVR at purchase (max. Intenders)
Current LVR
Loan with Big 4 bank
Use mortgage broker
Mortgagor Intender
$432,367 $486,968
$215,389 $383,730
74.0
78.8
51.0
n/a
66.8
80.3
37.9
38.3
Insurance
Home
Contents
Landlords
Mortgage repayment protection
Mortgagor Intender^
82.4
57.0
83.4
65.7
14.9
n/a
27.1
n/a
Amongst Intenders…
Prices are high and I cannot afford what I want*
Property will become increasingly unaffordable*
%
29.3
47.0
Amongst Mortgagors…
Ahead on minimum mortgage repayments
Mortgage caused financial strain last year
Could pay mortgage ongoing if lost job
%
46.0
21.2
53.4
Gender
Male
Female
%
51.4
48.6
Location
Capital city
Regional centre
Rural area
%
68.0
19.0
13.0
Household Income#
Sole income earner
Joint income earner
Main income earner
%
25.5
43.5
22.7
Age
18-24 years
25-34 years
35-44 years
45-54 years
55-65 years
Over 65 years
%
13.2
23.3
22.5
18.4
13.5
9.0
State/Territory
NSW & ACT
VIC & TAS
QLD
WA
SA & NT
%
34.3
29.8
15.9
12.2
7.8
$50,000 or less
$50,001 - $75,000
$75,001 - $100,000
$100,001 - $150,000
$150,001 - $200,000
More than $200,000
24.5
25.2
16.7
20.6
8.5
4.4
Lifestage
SINKs
DINKs
Family, primary aged kids
Family, high-school kids
Adult family
Older (55+) singles/couples
Retirees
%
14.5
16.2
25.8
9.4
12.0
10.2
11.9
Investments#
No investments
$50,000 or less
$50,001 - $150,000
$150,001 - $250,000
$250,001 - $350,000
$350,001 - $550,000
$550,001 - $1 million
More than $1 million
%
25.8
13.8
17.9
7.9
5.9
10.8
12.5
5.3
Base: Total sample, n=1,061 Mortgagors n=712; Intenders n=749;
^ Intenders who don’t have a mortgage n=349 *Percentage excluding don’t know /prefer not to say responses
28
Barometer 2014
Current Mortgagors profile
Property Ownership
Mortgagor, no intention
Mortgagor and intend to buy
No mortgage, intend to buy
Nett Mortgagor
Nett Intender
%
44.1
55.9
0.0
100.0
55.9
When bought / Intend to buy
Last / next 6 months
Last / next 7-12 months
Last / next 13-24 months
Last / next 3-5 years
More than 5 years ago
%
%
Mortgagor Intender
7.0
19.2
4.4
21.2
25.2
20.7
11.3
39.0
52.1
n/a
Subgroup Classification - Mortgagors
First home owner
Owner-occupier only
Investor only
Investor & owner-occupier
Subgroup Classification - Intenders
First Home Buyer
Subsequent home buyer
Investor
%
17.8
60.2
6.9
13.7
%
0.0
100.0
63.4
Property type bought / Intend to buy
Existing house
Existing unit
Other existing property
New house
New unit
Other new development
Land
Mortgagor Intender
50.9
53.6
9.4
18.5
4.8
18.7
18.4
38.8
5.7
21.6
4.5
19.6
4.2
5.5
Sentiment
Best time to buy is next 12 months
Interest rates will rise in second half of 2014*
Interest rates will fall in second half of 2014*
Property prices have risen in 2014*
Property prices have fallen in 2014*
Property is undervalued*
Property is overvalued*
Future generations will find harder to buy
Worry foreign inv. making property unaffordable
I am better off owning a home than renting
Housing price 'bubble' will burst + prices will fall
Worry I’ll never be able to afford my own home
%
37.6
34.2
7.1
50.7
24.7
20.5
52.6
82.1
67.6
65.8
41.2
26.0
Mortgage / Intended mortgage
Avg. property price (max. Intenders)
Avg. loan at purchase (max. Intenders)
Avg. LVR at purchase (max. Intenders)
Current LVR
Loan with Big 4 bank
Use mortgage broker
Mortgagor Intender
$432,367 $493,531
$215,389 $383,967
74.0
77.8
51.0
n/a
66.8
78.2
37.9
41.9
Insurance
Home
Contents
Landlords
Mortgage repayment protection
Mortgagor Intender^
82.4
n/a
83.4
n/a
14.9
n/a
27.1
n/a
Amongst Intenders…
Prices are high and I cannot afford what I want*
Property will become increasingly unaffordable*
%
23.3
44.6
Amongst Mortgagors…
Ahead on minimum mortgage repayments
Mortgage caused financial strain last year
Could pay mortgage ongoing if lost job
%
46.0
21.2
53.4
Gender
Male
Female
%
50.3
49.7
Location
Capital city
Regional centre
Rural area
%
68.0
18.0
14.0
Household Income#
Sole income earner
Joint income earner
Main income earner
%
23.8
43.7
24.4
Age
18-24 years
25-34 years
35-44 years
45-54 years
55-65 years
Over 65 years
%
9.9
24.2
25.0
20.7
13.1
7.1
State/Territory
NSW & ACT
VIC & TAS
QLD
WA
SA & NT
%
33.1
30.3
15.3
13.0
8.2
$50,000 or less
$50,001 - $75,000
$75,001 - $100,000
$100,001 - $150,000
$150,001 - $200,000
More than $200,000
18.4
26.3
17.0
24.4
9.3
4.6
Lifestage
SINKs
DINKs
Family, primary aged kids
Family, high-school kids
Adult family
Older (55+) singles/couples
Retirees
%
12.6
15.9
29.5
10.4
11.0
11.1
9.4
Investments#
No investments
$50,000 or less
$50,001 - $150,000
$150,001 - $250,000
$250,001 - $350,000
$350,001 - $550,000
$550,001 - $1 million
More than $1 million
%
23.2
13.4
18.3
7.2
5.5
13.5
13.8
5.2
Base: Mortgagors n=712; Mortgagors also Intenders n=400;
*Percentage excluding don’t know /prefer not to say responses xx Significantly higher than Intenders xx Significantly lower than Intenders
29
Property Intenders (purchase residential property in the next 5 years) profile
Property Ownership
%
When bought / Intend to buy
Mortgagor, no intention
0.0
Last / next 6 months
Mortgagor and intend to buy
53.3
Last / next 7-12 months
No mortgage, intend to buy
46.7
Last / next 13-24 months
Nett Mortgagor
53.3
Last / next 3-5 years
Nett Intender
100.0
More than 5 years ago
%
%
Mortgagor Intender
4.0
17.1
7.5
20.0
31.6
22.5
12.2
40.5
44.7
n/a
Subgroup Classification - Mortgagors
First home owner
Owner-occupier only
Investor only
Investor & owner-occupier
Subgroup Classification - Intenders
First Home Buyer
Subsequent home buyer
Investor
%
9.1
29.1
5.7
9.1
%
22.9
47.0
42.9
Property type bought / Intend to buy
Existing house
Existing unit
Other existing property
New house
New unit
Other new development
Land
Mortgagor Intender
47.9
55.1
12.3
19.7
5.1
19.6
14.2
37.1
7.9
19.8
6.2
18.1
4.1
4.8
Sentiment
Best time to buy is next 12 months
Interest rates will rise in second half of 2014*
Interest rates will fall in second half of 2014*
Property prices have risen in 2014*
Property prices have fallen in 2014*
Property is undervalued*
Property is overvalued*
Future generations will find harder to buy
Worry foreign inv. making property unaffordable
I am better off owning a home than renting
Housing price 'bubble' will burst + prices will fall
Worry I’ll never be able to afford my own home
%
36.1
43.3
7.0
53.5
25.8
16.5
60.3
78.9
64.5
62.3
46.8
35.1
Mortgage / Intended mortgage
Avg. property price (max. Intenders)
Avg. loan at purchase (max. Intenders)
Avg. LVR at purchase (max. Intenders)
Current LVR
Loan with Big 4 bank
Use mortgage broker
Mortgagor Intender
$459,686 $485,698
$218,078 $382,730
73.0
78.8
50.0
n/a
73.2
80.3
41.9
38.3
Insurance
Home
Contents
Landlords
Mortgage repayment protection
Mortgagor Intender^
78.2
57.0
81.4
65.7
19.0
n/a
29.3
n/a
Amongst Intenders…
Prices are high and I cannot afford what I want*
Property will become increasingly unaffordable*
%
29.3
47.0
Amongst Mortgagors…
Ahead on minimum mortgage repayments
Mortgage caused financial strain last year
Could pay mortgage ongoing if lost job
%
43.0
21.3
50.7
Gender
Male
Female
%
55.4
44.6
Location
Capital city
Regional centre
Rural area
%
71.0
19.0
10.0
Household Income#
Sole income earner
Joint income earner
Main income earner
%
26.4
43.3
23.7
Age
18-24 years
25-34 years
35-44 years
45-54 years
55-65 years
Over 65 years
%
15.8
26.8
21.9
16.4
11.3
7.7
State/Territory
NSW & ACT
VIC & TAS
QLD
WA
SA & NT
%
34.5
30.9
16.8
11.7
6.1
$50,000 or less
$50,001 - $75,000
$75,001 - $100,000
$100,001 - $150,000
$150,001 - $200,000
More than $200,000
24.2
23.2
16.7
21.5
8.9
5.5
Lifestage
SINKs
DINKs
Family, primary aged kids
Family, high-school kids
Adult family
Older (55+) singles/couples
Retirees
%
17.8
18.2
24.9
9.6
11.4
7.7
10.4
Investments#
No investments
$50,000 or less
$50,001 - $150,000
$150,001 - $250,000
$250,001 - $350,000
$350,001 - $550,000
$550,001 - $1 million
More than $1 million
%
25.8
13.8
17.9
7.9
5.9
10.8
12.5
5.3
Base: Intenders n=749; Intenders who also have a Mortgage n=400 xx Significantly higher than Intenders xx Significantly lower than Intenders
^ Intenders who don’t have a mortgage n=349 *Percentage excluding don’t know /prefer not to say responses
30
Barometer 2014
First Home Buyers profile
Property Ownership
Mortgagor, no intention
Mortgagor and intend to buy
No mortgage, intend to buy
Nett Mortgagor
Nett Intender
%
0.0
0.0
100.0
0.0
100.0
When bought / Intend to buy
Last / next 6 months
Last / next 7-12 months
Last / next 13-24 months
Last / next 3-5 years
More than 5 years ago
%
%
Mortgagor Intender
n/a
14.8
n/a
20.6
n/a
25.2
n/a
39.4
n/a
n/a
Subgroup Classification - Mortgagors
First home owner
Owner-occupier only
Investor only
Investor & owner-occupier
Subgroup Classification - Intenders
First Home Buyer
Subsequent home buyer
Investor
%
n/a
n/a
n/a
n/a
%
100.0
0.0
9.0
Property type bought / Intend to buy
Existing house
Existing unit
Other existing property
New house
New unit
Other new development
Land
Mortgagor Intender
44.4
59.9
12.7
20.9
4.4
20.6
16.0
44.3
8.6
19.3
6.7
15.6
4.2
5.0
Sentiment
Best time to buy is next 12 months
Interest rates will rise in second half of 2014*
Interest rates will fall in second half of 2014*
Property prices have risen in 2014*
Property prices have fallen in 2014*
Property is undervalued*
Property is overvalued*
Future generations will find harder to buy
Worry foreign inv. making property unaffordable
I am better off owning a home than renting
Housing price 'bubble' will burst + prices will fall
Worry I’ll never be able to afford my own home
%
34.1
59.6
6.7
55.9
25.9
10.0
71.2
75.6
53.4
54.8
43.9
62.7
Mortgage / Intended mortgage
Avg. property price (max. Intenders)
Avg. loan at purchase (max. Intenders)
Avg. LVR at purchase (max. Intenders)
Current LVR
Loan with Big 4 bank
Use mortgage broker
Mortgagor Intender
n/a
$487,246
n/a
$395,644
n/a
81.2
n/a
n/a
n/a
88.8
n/a
32.6
Insurance
Home
Contents
Landlords
Mortgage repayment protection
Mortgagor Intender^
n/a
42.2
n/a
50.6
n/a
n/a
n/a
n/a
Amongst Intenders…
Prices are high and I cannot afford what I want*
Property will become increasingly unaffordable*
%
48.6
52.7
Amongst Mortgagors…
Ahead on minimum mortgage repayments
Mortgage caused financial strain last year
Could pay mortgage ongoing if lost job
%
n/a
n/a
n/a
Gender
Male
Female
%
51.8
48.2
Location
Capital city
Regional centre
Rural area
%
75.0
16.0
9.0
Household Income#
Sole income earner
Joint income earner
Main income earner
%
27.2
49.0
15.1
Age
18-24 years
25-34 years
35-44 years
45-54 years
55-65 years
Over 65 years
%
32.6
33.9
20.4
10.0
3.0
0.0
State/Territory
NSW & ACT
VIC & TAS
QLD
WA
SA & NT
%
35.9
27.7
15.5
13.3
7.6
$50,000 or less
$50,001 - $75,000
$75,001 - $100,000
$100,001 - $150,000
$150,001 - $200,000
More than $200,000
31.6
25.8
20.0
9.8
8.5
4.4
Lifestage
SINKs
DINKs
Family, primary aged kids
Family, high-school kids
Adult family
Older (55+) singles/couples
Retirees
%
23.4
23.5
25.0
7.9
18.1
1.6
0.6
Investments#
No investments
$50,000 or less
$50,001 - $150,000
$150,001 - $250,000
$250,001 - $350,000
$350,001 - $550,000
$550,001 - $1 million
More than $1 million
%
47.4
19.6
17.2
3.2
4.2
2.3
2.4
3.6
Base: First Home Buyers n=167 xx Significantly higher than other Mortgagor/Intender groups xx Significantly lower than other Mortgagor/Intender
groups ^ Intenders who don’t have a mortgage n=349 *Percentage excluding don’t know /prefer not to say responses
31
Owner-Occupier profile
Property Ownership
Mortgagor, no intention
Mortgagor and intend to buy
No mortgage, intend to buy
Nett Mortgagor
Nett Intender
%
45.8
54.2
0.0
100.0
54.2
When bought / Intend to buy
Last / next 6 months
Last / next 7-12 months
Last / next 13-24 months
Last / next 3-5 years
More than 5 years ago
%
%
Mortgagor Intender
6.0
17.5
3.8
21.9
22.4
20.1
9.2
40.5
58.7
n/a
Subgroup Classification - Mortgagors
First home owner
Owner-occupier only
Investor only
Investor & owner-occupier
Subgroup Classification - Intenders
First Home Buyer
Subsequent home buyer
Investor
%
0.0
81.5
0.0
18.5
%
0.0
37.7
62.9
Property type bought / Intend to buy
Existing house
Existing unit
Other existing property
New house
New unit
Other new development
Land
Mortgagor Intender
52.9
54.6
8.8
17.4
5.5
19.1
18.3
35.1
4.6
18.5
3.7
16.9
4.0
3.6
Sentiment
Best time to buy is next 12 months
Interest rates will rise in second half of 2014*
Interest rates will fall in second half of 2014*
Property prices have risen in 2014*
Property prices have fallen in 2014*
Property is undervalued*
Property is overvalued*
Future generations will find harder to buy
Worry foreign inv. making property unaffordable
I am better off owning a home than renting
Housing price 'bubble' will burst + prices will fall
Worry I’ll never be able to afford my own home
%
36.7
32.0
7.8
50.0
23.3
21.3
53.3
83.7
70.1
69.7
39.9
23.3
Mortgage / Intended mortgage
Avg. property price (max. Intenders)
Avg. loan at purchase (max. Intenders)
Avg. LVR at purchase (max. Intenders)
Current LVR
Loan with Big 4 bank
Use mortgage broker
Mortgagor Intender
$406,538 $485,514
$200,504 $371,904
73.0
76.6
47.0
n/a
62.4
75.6
35.6
40.3
Insurance
Home
Contents
Landlords
Mortgage repayment protection
Mortgagor Intender^
87.4
n/a
87.3
n/a
14.5
n/a
26.2
n/a
Amongst Intenders…
Prices are high and I cannot afford what I want*
Property will become increasingly unaffordable*
%
22.3
43.9
Amongst Mortgagors…
Ahead on minimum mortgage repayments
Mortgage caused financial strain last year
Could pay mortgage ongoing if lost job
%
47.9
19.6
54.8
Gender
Male
Female
%
48.5
51.5
Location
Capital city
Regional centre
Rural area
%
67.0
19.0
15.0
Household Income#
Sole income earner
Joint income earner
Main income earner
%
25.0
44.1
22.6
Age
18-24 years
25-34 years
35-44 years
45-54 years
55-65 years
Over 65 years
%
5.3
19.7
25.3
24.4
16.4
9.0
State/Territory
NSW & ACT
VIC & TAS
QLD
WA
SA & NT
%
34.3
28.8
14.8
13.0
9.1
$50,000 or less
$50,001 - $75,000
$75,001 - $100,000
$100,001 - $150,000
$150,001 - $200,000
More than $200,000
18.5
26.2
16.7
24.8
9.7
4.2
Lifestage
SINKs
DINKs
Family, primary aged kids
Family, high-school kids
Adult family
Older (55+) singles/couples
Retirees
%
10.7
11.8
28.6
10.8
12.4
13.6
12.2
Investments#
No investments
$50,000 or less
$50,001 - $150,000
$150,001 - $250,000
$250,001 - $350,000
$350,001 - $550,000
$550,001 - $1 million
More than $1 million
%
23.3
12.3
18.1
7.5
6.0
13.1
14.1
5.5
Base: Owner occupiers n=533; Owner Occupiers who are also Intenders n=289 xx Significantly higher than other Mortgagor/Intender groups xx
Significantly lower than other Mortgagor/Intender groups *Percentage excluding don’t know /prefer not to say responses
32
Barometer 2014
Current Investor profile
Property Ownership
Mortgagor, no intention
Mortgagor and intend to buy
No mortgage, intend to buy
Nett Mortgagor
Nett Intender
%
45.8
54.2
0.0
100.0
54.2
When bought / Intend to buy
Last / next 6 months
Last / next 7-12 months
Last / next 13-24 months
Last / next 3-5 years
More than 5 years ago
%
%
Mortgagor Intender
9.0
27.4
4.7
27.4
30.7
27.5
19.8
17.6
35.8
n/a
Subgroup Classification - Mortgagors
First home owner
Owner-occupier only
Investor only
Investor & owner-occupier
Subgroup Classification - Intenders
First Home Buyer
Subsequent home buyer
Investor
%
0.0
0.0
34.1
65.9
%
0.0
16.6
84.0
Property type bought / Intend to buy
Existing house
Existing unit
Other existing property
New house
New unit
Other new development
Land
Mortgagor Intender
43.5
51.7
12.7
25.5
5.7
25.5
13.5
34.9
9.2
26.3
6.7
28.8
4.4
10.3
Sentiment
Best time to buy is next 12 months
Interest rates will rise in second half of 2014*
Interest rates will fall in second half of 2014*
Property prices have risen in 2014*
Property prices have fallen in 2014*
Property is undervalued*
Property is overvalued*
Future generations will find harder to buy
Worry foreign inv. making property unaffordable
I am better off owning a home than renting
Housing price 'bubble' will burst + prices will fall
Worry I’ll never be able to afford my own home
%
45.1
32.1
8.2
54.2
22.4
19.2
46.7
82.9
68.0
67.1
37.9
22.6
Mortgage / Intended mortgage
Avg. property price (max. Intenders)
Avg. loan at purchase (max. Intenders)
Avg. LVR at purchase (max. Intenders)
Current LVR
Loan with Big 4 bank
Use mortgage broker
Mortgagor Intender
$549,820 $546,844
$265,714 $453,881
75.0
83.0
57.0
n/a
67.4
78.6
45.1
40.5
Insurance
Home
Contents
Landlords
Mortgage repayment protection
Mortgagor Intender^
78.3
n/a
83.7
n/a
73.4
n/a
35.0
n/a
Amongst Intenders…
Prices are high and I cannot afford what I want*
Property will become increasingly unaffordable*
%
16.8
35.9
Amongst Mortgagors…
Ahead on minimum mortgage repayments
Mortgage caused financial strain last year
Could pay mortgage ongoing if lost job
%
47.4
16.2
59.1
Gender
Male
Female
%
55.2
44.8
Location
Capital city
Regional centre
Rural area
%
73.0
18.0
9.0
Household Income#
Sole income earner
Joint income earner
Main income earner
%
21.1
46.0
31.2
Age
18-24 years
25-34 years
35-44 years
45-54 years
55-65 years
Over 65 years
%
5.8
25.7
29.2
27.7
10.7
1.0
State/Territory
NSW & ACT
VIC & TAS
QLD
WA
SA & NT
%
27.0
35.3
18.0
12.4
7.4
$50,000 or less
$50,001 - $75,000
$75,001 - $100,000
$100,001 - $150,000
$150,001 - $200,000
More than $200,000
7.8
13.8
19.5
34.8
16.3
7.8
Lifestage
SINKs
DINKs
Family, primary aged kids
Family, high-school kids
Adult family
Older (55+) singles/couples
Retirees
%
11.4
19.0
34.1
10.4
10.6
8.6
5.8
Investments#
No investments
$50,000 or less
$50,001 - $150,000
$150,001 - $250,000
$250,001 - $350,000
$350,001 - $550,000
$550,001 - $1 million
More than $1 million
%
7.7
2.5
11.2
8.1
5.3
20.3
28.1
16.8
Base: Current Investors n=150; Current Investors who are also Intenders n=111; xx Significantly higher than other Mortgagor/Intender groups xx
Significantly lower than other Mortgagor/Intender groups *Percentage excluding don’t know /prefer not to say responses
33
Potential Investor profile
Property Ownership
Mortgagor, no intention
Mortgagor and intend to buy
No mortgage, intend to buy
Nett Mortgagor
Nett Intender
%
25.7
73.2
1.1
98.9
74.3
When bought / Intend to buy
Last / next 6 months
Last / next 7-12 months
Last / next 13-24 months
Last / next 3-5 years
More than 5 years ago
%
%
Mortgagor Intender
8.0
19.0
6.3
24.4
33.9
21.7
13.7
34.9
38.0
n/a
Subgroup Classification - Mortgagors
First home owner
Owner-occupier only
Investor only
Investor & owner-occupier
Subgroup Classification - Intenders
First Home Buyer
Subsequent home buyer
Investor
%
11.2
37.6
10.8
17.9
%
4.8
0.0
100.0
Property type bought / Intend to buy
Existing house
Existing unit
Other existing property
New house
New unit
Other new development
Land
Mortgagor Intender
45.3
52.8
13.2
24.6
4.0
20.9
15.9
36.0
10.0
27.0
6.1
22.5
3.8
5.3
Sentiment
Best time to buy is next 12 months
Interest rates will rise in second half of 2014*
Interest rates will fall in second half of 2014*
Property prices have risen in 2014*
Property prices have fallen in 2014*
Property is undervalued*
Property is overvalued*
Future generations will find harder to buy
Worry foreign inv. making property unaffordable
I am better off owning a home than renting
Housing price 'bubble' will burst + prices will fall
Worry I’ll never be able to afford my own home
%
39.9
41.8
7.7
51.4
30.3
18.6
56.2
80.5
69.5
61.3
50.1
29.5
Mortgage / Intended mortgage
Avg. property price (max. Intenders)
Avg. loan at purchase (max. Intenders)
Avg. LVR at purchase (max. Intenders)
Current LVR
Loan with Big 4 bank
Use mortgage broker
Mortgagor Intender
$463,718 $497,384
$243,040 $400,394
73.0
80.5
53.0
n/a
79.7
81.3
43.6
40.7
Insurance
Home
Contents
Landlords
Mortgage repayment protection
Mortgagor Intender^
78.6
75.2
82.1
78.0
23.9
n/a
32.5
n/a
Amongst Intenders…
Prices are high and I cannot afford what I want*
Property will become increasingly unaffordable*
%
20.3
42.1
Amongst Mortgagors…
Ahead on minimum mortgage repayments
Mortgage caused financial strain last year
Could pay mortgage ongoing if lost job
%
46.0
21.2
53.4
Gender
Male
Female
%
62.0
38.0
Location
Capital city
Regional centre
Rural area
%
73.0
17.0
10.0
Household Income#
Sole income earner
Joint income earner
Main income earner
%
43.7
19.8
48.2
Age
18-24 years
25-34 years
35-44 years
45-54 years
55-65 years
Over 65 years
%
13.6
29.4
22.1
21.8
10.1
3.0
State/Territory
NSW & ACT
VIC & TAS
QLD
WA
SA & NT
%
35.5
32.0
16.3
10.7
5.5
$50,000 or less
$50,001 - $75,000
$75,001 - $100,000
$100,001 - $150,000
$150,001 - $200,000
More than $200,000
15.4
18.6
16.4
27.3
13.8
8.4
Lifestage
SINKs
DINKs
Family, primary aged kids
Family, high-school kids
Adult family
Older (55+) singles/couples
Retirees
%
18.1
18.3
28.1
11.8
11.0
6.6
6.2
Investments#
No investments
$50,000 or less
$50,001 - $150,000
$150,001 - $250,000
$250,001 - $350,000
$350,001 - $550,000
$550,001 - $1 million
More than $1 million
%
14.1
11.1
16.6
7.9
7.0
16.9
18.5
8.0
Base: Potential Investors n=316; Potential investors who are also Mortgagors n=242; xx Significantly higher than other Mortgagor/Intender groups xx
Significantly lower than other Mortgagor/Intender groups ^ Intenders who don’t have a mortgage n=74 *Percentage excluding don’t know responses
34
Barometer 2014
NSW/ACT profile
Property Ownership
Mortgagor, no intention
Mortgagor and intend to buy
No mortgage, intend to buy
Nett Mortgagor
Nett Intender
%
29.2
35.5
35.2
64.8
70.8
When bought / Intend to buy
Last / next 6 months
Last / next 7-12 months
Last / next 13-24 months
Last / next 3-5 years
More than 5 years ago
%
%
Mortgagor Intender
8.4
17.1
3.0
20.0
25.2
22.5
11.3
40.5
52.1
n/a
Subgroup Classification - Mortgagors
First home owner
Owner-occupier only
Investor only
Investor & owner-occupier
Subgroup Classification - Intenders
First Home Buyer
Subsequent home buyer
Investor
%
10.6
42.8
4.2
6.8
%
16.9
45.3
44.5
Property type bought / Intend to buy
Existing house
Existing unit
Other existing property
New house
New unit
Other new development
Land
Mortgagor Intender
50.9
55.1
9.4
19.7
4.8
19.6
18.4
37.1
5.7
19.8
4.5
18.1
4.2
4.8
Sentiment
Best time to buy is next 12 months
Interest rates will rise in second half of 2014*
Interest rates will fall in second half of 2014*
Property prices have risen in 2014*
Property prices have fallen in 2014*
Property is undervalued*
Property is overvalued*
Future generations will find harder to buy
Worry foreign inv. making property unaffordable
I am better off owning a home than renting
Housing price 'bubble' will burst + prices will fall
Worry I’ll never be able to afford my own home
%
32.7
39.5
7.4
59.4
20.8
15.4
64.5
77.8
66.8
60.2
45.1
31.8
Mortgage / Intended mortgage
Avg. property price (max. Intenders)
Avg. loan at purchase (max. Intenders)
Avg. LVR at purchase (max. Intenders)
Current LVR
Loan with Big 4 bank
Use mortgage broker
Mortgagor Intender
$432,367 $486,968
$215,389 $383,730
74.0
78.8
51.0
n/a
66.8
80.3
37.9
38.3
Insurance
Home
Contents
Landlords
Mortgage repayment protection
Mortgagor Intender^
82.4
57.0
83.4
65.7
14.9
n/a
27.1
n/a
Amongst Intenders…
Prices are high and I cannot afford what I want*
Property will become increasingly unaffordable*
%
33.7
44.5
Amongst Mortgagors…
Ahead on minimum mortgage repayments
Mortgage caused financial strain last year
Could pay mortgage ongoing if lost job
%
37.0
20.7
56.8
Gender
Male
Female
%
54.3
45.7
Location
Capital city
Regional centre
Rural area
%
66.0
20.0
15.0
Household Income#
Sole income earner
Joint income earner
Main income earner
%
25.3
43.0
23.2
Age
18-24 years
25-34 years
35-44 years
45-54 years
55-65 years
Over 65 years
%
14.9
23.7
21.8
18.2
12.3
9.2
State/Territory
NSW & ACT
VIC & TAS
QLD
WA
SA & NT
%
100.0
0.0
0.0
0.0
0.0
$50,000 or less
$50,001 - $75,000
$75,001 - $100,000
$100,001 - $150,000
$150,001 - $200,000
More than $200,000
21.9
25.7
18.1
18.7
10.0
5.5
Lifestage
SINKs
DINKs
Family, primary aged kids
Family, high-school kids
Adult family
Older (55+) singles/couples
Retirees
%
16.3
15.2
27.7
7.8
11.7
9.4
11.9
Investments#
No investments
$50,000 or less
$50,001 - $150,000
$150,001 - $250,000
$250,001 - $350,000
$350,001 - $550,000
$550,001 - $1 million
More than $1 million
%
23.0
16.5
17.0
7.9
6.5
9.0
14.4
5.7
Base: NSW/ACT n=355; Mortgagors n=227; Intenders n=255; xx Significantly higher than other states xx Significantly lower than other states
^ Intenders who don’t have a mortgage n=128 *Percentage excluding don’t know /prefer not to say responses
35
VIC/TAS profile
Property Ownership
Mortgagor, no intention
Mortgagor and intend to buy
No mortgage, intend to buy
Nett Mortgagor
Nett Intender
%
27.0
41.3
31.7
68.3
73.0
When bought / Intend to buy
Last / next 6 months
Last / next 7-12 months
Last / next 13-24 months
Last / next 3-5 years
More than 5 years ago
%
%
Mortgagor Intender
6.0
17.7
9.3
22.9
21.5
22.6
11.9
36.9
51.2
n/a
Subgroup Classification - Mortgagors
First home owner
Owner-occupier only
Investor only
Investor & owner-occupier
Subgroup Classification - Intenders
First Home Buyer
Subsequent home buyer
Investor
%
12.9
37.5
6.0
10.5
%
15.0
44.9
45.3
Property type bought / Intend to buy
Existing house
Existing unit
Other existing property
New house
New unit
Other new development
Land
Mortgagor Intender
46.4
53.8
8.9
20.8
4.7
18.8
20.4
37.6
7.2
20.1
5.6
20.4
4.2
5.1
Sentiment
Best time to buy is next 12 months
Interest rates will rise in second half of 2014*
Interest rates will fall in second half of 2014*
Property prices have risen in 2014*
Property prices have fallen in 2014*
Property is undervalued*
Property is overvalued*
Future generations will find harder to buy
Worry foreign inv. making property unaffordable
I am better off owning a home than renting
Housing price 'bubble' will burst + prices will fall
Worry I’ll never be able to afford my own home
%
38.3
37.0
8.9
55.8
25.0
14.5
56.9
83.6
66.4
67.0
44.2
32.2
Mortgage / Intended mortgage
Avg. property price (max. Intenders)
Avg. loan at purchase (max. Intenders)
Avg. LVR at purchase (max. Intenders)
Current LVR
Loan with Big 4 bank
Use mortgage broker
Mortgagor Intender
$373,990 $483,356
$187,905 $364,934
75.0
75.5
50.0
n/a
72.3
82.9
35.1
38.9
Insurance
Home
Contents
Landlords
Mortgage repayment protection
Mortgagor Intender^
82.5
69.3
84.9
69.6
18.0
n/a
29.7
n/a
Amongst Intenders…
Prices are high and I cannot afford what I want*
Property will become increasingly unaffordable*
%
25.6
48.6
Amongst Mortgagors…
Ahead on minimum mortgage repayments
Mortgage caused financial strain last year
Could pay mortgage ongoing if lost job
%
50.1
19.1
52.8
Gender
Male
Female
%
49.8
50.2
Location
Capital city
Regional centre
Rural area
%
76.0
12.0
12.0
Household Income#
Sole income earner
Joint income earner
Main income earner
%
26.8
41.9
23.8
Age
18-24 years
25-34 years
35-44 years
45-54 years
55-65 years
Over 65 years
%
11.5
23.9
23.8
18.9
14.5
7.5
State/Territory
NSW & ACT
VIC & TAS
QLD
WA
SA & NT
%
0.0
100.0
0.0
0.0
0.0
$50,000 or less
$50,001 - $75,000
$75,001 - $100,000
$100,001 - $150,000
$150,001 - $200,000
More than $200,000
24.7
24.9
14.5
22.6
9.2
4.0
Lifestage
SINKs
DINKs
Family, primary aged kids
Family, high-school kids
Adult family
Older (55+) singles/couples
Retirees
%
14.0
16.9
25.3
10.4
12.7
10.6
10.1
Investments#
No investments
$50,000 or less
$50,001 - $150,000
$150,001 - $250,000
$250,001 - $350,000
$350,001 - $550,000
$550,001 - $1 million
More than $1 million
%
23.7
13.8
19.2
6.6
7.0
8.6
13.6
7.5
Base: VIC/TAS n=312; Mortgagors n=213; Intenders n=229;; xx Significantly higher than other states xx Significantly lower than other states
^ Intenders who don’t have a mortgage n=99 *Percentage excluding don’t know /prefer not to say responses
36
Barometer 2014
QLD profile
Property Ownership
Mortgagor, no intention
Mortgagor and intend to buy
No mortgage, intend to buy
Nett Mortgagor
Nett Intender
%
25.6
39.1
35.3
64.7
74.4
When bought / Intend to buy
Last / next 6 months
Last / next 7-12 months
Last / next 13-24 months
Last / next 3-5 years
More than 5 years ago
%
%
Mortgagor Intender
5.0
18.8
6.1
18.1
27.6
24.6
11.1
38.5
50.3
n/a
Subgroup Classification - Mortgagors
First home owner
Owner-occupier only
Investor only
Investor & owner-occupier
Subgroup Classification - Intenders
First Home Buyer
Subsequent home buyer
Investor
%
12.3
36.2
5.7
10.1
%
15.7
51.9
41.7
Property type bought / Intend to buy
Existing house
Existing unit
Other existing property
New house
New unit
Other new development
Land
Mortgagor Intender
57.7
61.0
8.8
18.7
3.7
14.4
17.2
38.9
0.6
18.2
4.9
17.6
2.5
6.6
Sentiment
Best time to buy is next 12 months
Interest rates will rise in second half of 2014*
Interest rates will fall in second half of 2014*
Property prices have risen in 2014*
Property prices have fallen in 2014*
Property is undervalued*
Property is overvalued*
Future generations will find harder to buy
Worry foreign inv. making property unaffordable
I am better off owning a home than renting
Housing price 'bubble' will burst + prices will fall
Worry I’ll never be able to afford my own home
%
39.8
38.1
4.6
46.0
22.8
32.2
41.8
74.9
62.3
58.0
39.4
26.0
Mortgage / Intended mortgage
Avg. property price (max. Intenders)
Avg. loan at purchase (max. Intenders)
Avg. LVR at purchase (max. Intenders)
Current LVR
Loan with Big 4 bank
Use mortgage broker
Mortgagor Intender
$390,434 $447,655
$192,472 $354,096
70.0
79.1
51.0
n/a
63.9
77.5
42.2
40.0
Insurance
Home
Contents
Landlords
Mortgage repayment protection
Mortgagor Intender^
83.8
49.4
85.6
71.3
20.3
n/a
36.0
n/a
Amongst Intenders…
Prices are high and I cannot afford what I want*
Property will become increasingly unaffordable*
%
20.0
47.0
Amongst Mortgagors…
Ahead on minimum mortgage repayments
Mortgage caused financial strain last year
Could pay mortgage ongoing if lost job
%
50.7
26.5
49.1
Gender
Male
Female
%
56.0
44.0
Location
Capital city
Regional centre
Rural area
%
41.0
47.0
12.0
Household Income#
Sole income earner
Joint income earner
Main income earner
%
25.2
38.1
27.0
Age
18-24 years
25-34 years
35-44 years
45-54 years
55-65 years
Over 65 years
%
14.9
29.2
22.1
14.0
9.2
10.5
State/Territory
NSW & ACT
VIC & TAS
QLD
WA
SA & NT
%
0.0
0.0
100.0
0.0
0.0
$50,000 or less
$50,001 - $75,000
$75,001 - $100,000
$100,001 - $150,000
$150,001 - $200,000
More than $200,000
23.8
26.4
19.4
21.5
5.7
3.0
Lifestage
SINKs
DINKs
Family, primary aged kids
Family, high-school kids
Adult family
Older (55+) singles/couples
Retirees
%
14.5
21.4
24.4
8.5
8.7
11.2
11.3
Investments#
No investments
$50,000 or less
$50,001 - $150,000
$150,001 - $250,000
$250,001 - $350,000
$350,001 - $550,000
$550,001 - $1 million
More than $1 million
%
26.9
9.9
19.2
10.0
5.7
16.7
10.4
1.2
Base: QLD n=178; Mortgagors n=115; Intenders n=131;; xx Significantly higher than other states xx Significantly lower than other states
^ Intenders who don’t have a mortgage n=63 *Percentage excluding don’t know /prefer not to say responses
37
WA profile
Property Ownership
Mortgagor, no intention
Mortgagor and intend to buy
No mortgage, intend to buy
Nett Mortgagor
Nett Intender
%
32.6
38.9
28.5
71.5
67.4
When bought / Intend to buy
Last / next 6 months
Last / next 7-12 months
Last / next 13-24 months
Last / next 3-5 years
More than 5 years ago
%
%
Mortgagor Intender
5.0
17.9
3.5
16.8
29.0
21.2
9.9
44.1
52.6
n/a
Subgroup Classification - Mortgagors
First home owner
Owner-occupier only
Investor only
Investor & owner-occupier
Subgroup Classification - Intenders
First Home Buyer
Subsequent home buyer
Investor
%
16.9
40.4
1.9
12.3
%
17.6
49.0
39.8
Property type bought / Intend to buy
Existing house
Existing unit
Other existing property
New house
New unit
Other new development
Land
Mortgagor Intender
55.8
56.2
3.6
14.3
5.3
22.5
21.5
40.4
5.2
19.9
2.5
11.9
6.2
4.5
Sentiment
Best time to buy is next 12 months
Interest rates will rise in second half of 2014*
Interest rates will fall in second half of 2014*
Property prices have risen in 2014*
Property prices have fallen in 2014*
Property is undervalued*
Property is overvalued*
Future generations will find harder to buy
Worry foreign inv. making property unaffordable
I am better off owning a home than renting
Housing price 'bubble' will burst + prices will fall
Worry I’ll never be able to afford my own home
%
30.5
40.8
5.9
42.9
29.6
10.0
71.3
88.5
64.8
75.1
47.9
31.3
Mortgage / Intended mortgage
Avg. property price (max. Intenders)
Avg. loan at purchase (max. Intenders)
Avg. LVR at purchase (max. Intenders)
Current LVR
Loan with Big 4 bank
Use mortgage broker
Mortgagor Intender
$490,874 $514,580
$296,704 $407,548
81.0
79.2
69.0
n/a
64.7
78.2
42.1
47.8
Insurance
Home
Contents
Landlords
Mortgage repayment protection
Mortgagor Intender^
86.0
45.4
84.9
55.9
15.5
n/a
22.2
n/a
Amongst Intenders…
Prices are high and I cannot afford what I want*
Property will become increasingly unaffordable*
%
39.2
41.5
Amongst Mortgagors…
Ahead on minimum mortgage repayments
Mortgage caused financial strain last year
Could pay mortgage ongoing if lost job
%
48.4
22.0
54.2
Gender
Male
Female
%
40.6
59.4
Location
Capital city
Regional centre
Rural area
%
83.0
4.0
14.0
Household Income#
Sole income earner
Joint income earner
Main income earner
%
24.8
51.8
16.4
Age
18-24 years
25-34 years
35-44 years
45-54 years
55-65 years
Over 65 years
%
12.0
22.0
22.6
18.0
17.3
8.1
State/Territory
NSW & ACT
VIC & TAS
QLD
WA
SA & NT
%
0.0
0.0
0.0
100.0
0.0
$50,000 or less
$50,001 - $75,000
$75,001 - $100,000
$100,001 - $150,000
$150,001 - $200,000
More than $200,000
28.2
23.0
14.3
21.6
7.6
5.3
Lifestage
SINKs
DINKs
Family, primary aged kids
Family, high-school kids
Adult family
Older (55+) singles/couples
Retirees
%
14.0
12.0
26.6
8.7
14.8
8.5
15.5
Investments#
No investments
$50,000 or less
$50,001 - $150,000
$150,001 - $250,000
$250,001 - $350,000
$350,001 - $550,000
$550,001 - $1 million
More than $1 million
%
30.0
12.2
17.1
8.8
3.6
14.4
8.2
5.7
Base: WA n=127; Mortgagors n=91; Intenders n=88;; xx Significantly higher than other states xx Significantly lower than other states
^ Intenders who don’t have a mortgage n=36 *Percentage excluding don’t know /prefer not to say responses
38
Barometer 2014
SA/NT profile
Property Ownership
Mortgagor, no intention
Mortgagor and intend to buy
No mortgage, intend to buy
Nett Mortgagor
Nett Intender
%
44.9
26.0
29.0
71.0
55.1
When bought / Intend to buy
Last / next 6 months
Last / next 7-12 months
Last / next 13-24 months
Last / next 3-5 years
More than 5 years ago
%
%
Mortgagor Intender
3.0
13.7
2.6
14.8
18.6
26.6
11.9
45.0
64.0
n/a
Subgroup Classification - Mortgagors
First home owner
Owner-occupier only
Investor only
Investor & owner-occupier
Subgroup Classification - Intenders
First Home Buyer
Subsequent home buyer
Investor
%
6.5
50.2
5.2
8.1
%
15.7
50.5
38.6
Property type bought / Intend to buy
Existing house
Existing unit
Other existing property
New house
New unit
Other new development
Land
Mortgagor Intender
67.4
65.3
2.6
7.9
1.5
21.8
15.5
51.8
1.8
8.3
3.8
20.7
6.2
9.0
Sentiment
Best time to buy is next 12 months
Interest rates will rise in second half of 2014*
Interest rates will fall in second half of 2014*
Property prices have risen in 2014*
Property prices have fallen in 2014*
Property is undervalued*
Property is overvalued*
Future generations will find harder to buy
Worry foreign inv. making property unaffordable
I am better off owning a home than renting
Housing price 'bubble' will burst + prices will fall
Worry I’ll never be able to afford my own home
%
39.8
42.3
9.5
49.0
22.1
17.9
49.3
80.5
59.2
63.5
29.1
33.6
Mortgage / Intended mortgage
Avg. property price (max. Intenders)
Avg. loan at purchase (max. Intenders)
Avg. LVR at purchase (max. Intenders)
Current LVR
Loan with Big 4 bank
Use mortgage broker
Mortgagor Intender
$369,713 $401,462
$166,801 $317,397
76.0
79.1
47.0
n/a
57.6
70.4
46.7
29.9
Insurance
Home
Contents
Landlords
Mortgage repayment protection
Mortgagor Intender^
86.2
72.0
86.4
79.1
10.1
n/a
23.7
n/a
Amongst Intenders…
Prices are high and I cannot afford what I want*
Property will become increasingly unaffordable*
%
30.3
63.1
Amongst Mortgagors…
Ahead on minimum mortgage repayments
Mortgage caused financial strain last year
Could pay mortgage ongoing if lost job
%
54.6
19.9
49.1
Gender
Male
Female
%
52.8
47.2
Location
Capital city
Regional centre
Rural area
%
82.0
6.0
12.0
Household Income#
Sole income earner
Joint income earner
Main income earner
%
23.4
49.8
17.2
Age
18-24 years
25-34 years
35-44 years
45-54 years
55-65 years
Over 65 years
%
11.4
9.4
21.3
27.6
18.3
12.0
State/Territory
NSW & ACT
VIC & TAS
QLD
WA
SA & NT
%
0.0
0.0
0.0
0.0
100.0
$50,000 or less
$50,001 - $75,000
$75,001 - $100,000
$100,001 - $150,000
$150,001 - $200,000
More than $200,000
30.8
24.2
16.7
18.6
6.8
3.0
Lifestage
SINKs
DINKs
Family, primary aged kids
Family, high-school kids
Adult family
Older (55+) singles/couples
Retirees
%
9.2
13.7
20.8
16.0
12.9
13.1
14.2
Investments#
No investments
$50,000 or less
$50,001 - $150,000
$150,001 - $250,000
$250,001 - $350,000
$350,001 - $550,000
$550,001 - $1 million
More than $1 million
%
36.3
13.7
15.9
6.5
4.0
9.0
11.1
3.5
Base: Base: SA/NT n=89; Mortgagors n=66; Intenders n=46; xx Significantly higher than other states xx Significantly lower than other states
^ Intenders who don’t have a mortgage n=23 *Percentage excluding don’t know /prefer not to say responses
39
40
Barometer 2014
41
Appendix
USING THIS RESEARCH
It is important that readers should be aware of the limitations of survey research.
Qualitative Research
Qualitative research deals with relatively small numbers of respondents and attempts to explore in–depth motivations,
attitudes and feelings. This places a considerable interpretative burden on the researcher. For example, often what
respondents do not say is as important as what they do. Similarly, body language and tone of voice can be important
contributors to understanding respondents’ deeper feelings.
Readers should therefore recognise:
• that despite the efforts made in recruitment, respondents may not always be totally representative of the target
audience concerned
• that findings are interpretative in nature, based on the experience and expertise of the researchers concerned
Quantitative Research
Even though quantitative research typically deals with larger numbers of respondents, readers of survey results should be
conscious of the limitations of all sample survey techniques.
Sampling techniques, the level of refusals, and problems with non-contacts all impact on the statistical reliability that can be
attached to results.
Similarly quantitative research is often limited in the number of variables it covers, with important variables beyond the
scope of the survey.
Hence the results of sample surveys are usually best treated as a means of looking at the relative merits of different
approaches as opposed to absolute measures of expected outcomes.
The Role of Researcher and Readers
GfK Australia believes that the researchers’ task is not only to present the findings of the research but also to utilise
our experience and expertise to interpret these findings for readers and to make our recommendations (based on
that interpretation and our knowledge of the market) as to what we believe to be the optimum actions to be taken in
the circumstances: indeed this is what we believe readers’ seek when they hire our services. Such interpretations and
recommendations are presented in good faith, but we make no claim to be infallible.
Readers should, therefore, review the findings and recommendations in the light of their own experience and knowledge of
the market and base their actions accordingly.
Quality Control and Data Retention
GfK Australia is a member of the Australian Market and Social Research Organisations (AMSRO) and complies in full with the
Market Research Privacy Principles. In addition all researchers at GfK Australia are AMSRS members and are bound by the
market research Code of Professional Behaviour.
GfK Australia is an ISO 20252 accredited company and undertakes all research activities in compliance with the ISO 20252
quality assurance standard
Raw data relating to this project shall be kept as per the requirements outlined in the market research Code of
Professional Behaviour.
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