Demand for residential property is set to remain strong over the next 12 months despite signs of a decline, according to new research by a non-major bank.
ME’s latest Property Buying Intentions Report found that over the six months to January 2016, the proportion of respondents intending to buy property over the next 12 months fell by one percentage point to 16 per cent.
Furthermore, the percentage of respondents looking to buy an investment property fell by five points to 33 per cent.
However, the proportion of respondents looking to buy a home to live in 2016 rose by five percentage points to 50 per cent.
The survey also revealed that 22 per cent of first home buyers intend to purchase property over the next 12 months – up one per cent over the six months to January.
Looking at the generations, 25 per cent of Gen Y respondents intend to buy property over the next 12 months, compared to 19 per cent of Gen X respondents, and 9 per cent of baby boomers.
ME treasurer John Caelli said that while recent tightening in bank prudential regulations and lending criteria have reduced the proportion of investor buyers, overall demand for property could be buoyed by a rise in owner-occupier demand.
“Demand expectations from buyers may also remain strong due to unmet demand from owner-occupiers supported by continued low borrowing costs and recent improvements in the labour market,” he added.
[Related: Multi-units drive decline in new home sales]