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New NAB research has revealed that borrowing capacity is most important for buyers in regard to purchasing a new home.
In the latest NAB Residential Property survey, more than eight in 10 property professionals (82 per cent) stated that the amount buyers were prepared to borrow to buy was the largest factor, showing a rise from 74 per cent from the same period last year before the rate hikes began.
The survey was conducted with 350 real estate agents and managers, property developers, asset and fund managers, and owners/investors across the country.
Further findings from the survey revealed that location was another big factor for home buyers, with 60 per cent stating that access to local shopping, restaurants and other amenities is key. Furthermore, 57 per cent of respondents stated that house size was important, up from 50 per cent in 2021.
On the other hand, fewer respondents highlighted buying a house instead of an apartment (45 per cent, down from 53 per cent last year), land size that was at 44 per cent down from 52 per cent, having a study/work area (21 per cent down from 26 per cent), or located in a regional area (16 per cent, down from 21 per cent) as key considerations.
Research has also revealed that the rising cost of renovations is having a “quite significant” influence, encouraging people to buy fully renovated properties.
NAB executive home ownership Andy Kerr stated the market is “starting to see a shift” as more and more Australians begin to consider affordability in a rising rate environment.
“A trend we are seeing emerge from the pandemic is more Aussies considering apartments over houses for the first time since the survey began, driven by return to office working and caution on borrowing amounts,” Mr Kerr said.
“Affordability and rising interest rates are absolutely part of the equation for home buyers.
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“In a rising rate environment, where people are uncertain on when the rising rate cycle will end, Australians are more cautious on what they can afford.”
The bank's outlook for property prices remains "broadly unchanged", with dwelling prices expected to decline by around 20 per cent throughout the capitals from the peak in mid-2022.
Dwelling prices to drop 8% this year
According to the Commonwealth Bank of Australia’s (CBA) State & Territory Perspective, the housing market will continue to see house price declines over this year and next.
CBA’s dwelling price forecasts showed that it expects dwelling prices to drop 8 per cent across Australia this year and by another 3 per cent in 2023.
[RELATED: Prices to drop 8% this year: CBA]
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