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The Great Australian Dream: What does it look like?

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Malavika Santhebennur 7 minute read

In the past year, the booming property market has kept brokers on their toes as they race to ensure that their clients are ready with housing finance to compete with the high volume of home buyers vying for limited stock.

If there is one topic that has dominated discussions in Australia in the past year, it’s the bubbling housing market.

The great Australian dream of home ownership is alive and well because there is an innate belief that it could lead to financial wellness and security.

This could partly explain why buyer demand has risen to record levels in the past year (while supply has declined), driving property prices through the roof. Other factors driving demand include record-low mortgage rates and government stimulus measures to combat the impacts of the COVID-19 crisis.


In addition, fear of missing out could be driving buyers to scramble to buy property before they become unaffordable, particularly first home buyers (FHB) despite affordability constraints. According to ANZ Research, FHB loans reached a new peak of $456,000 in June 2021.

For their part, brokers have been at the forefront of servicing their clients amid the demand. This has underscored the importance of them being abreast of changing housing trends in their state or territory such as home-buyer preferences (including property size and location), average loan sizes, and average time on market for a property, so they can tailor their advice.

Indeed, preferences have changed considerably over the past 18 months. For example, rising housing affordability constraints and flexible remote working arrangements since the onset of the COVID-19 crisis have shifted preferences towards regional Australia (where properties are more affordable).

Along with this, working from and spending more time at home during lockdowns have resulted in more searches for properties with at least three bedrooms over the past year, illustrating growing preferences for more space.

According to REA Insights, fewer buyers are searching for inner-city units (many of which have one or two bedrooms). On the other hand, in regional areas, demand for smaller properties has increased, driven by downsizers looking to move or home buyers eyeing investment or holiday properties.


Additionally, days on market for a property have reduced substantially across Australia, while CoreLogic figures revealed that vendors were offering discounts of just 2.8 per cent in the three months to July compared with 4.0 per cent in 2020, indicating a seller’s market.

Being armed with this knowledge could assist brokers with determining whether their clients’ preferences match their affordability levels, and ensuring that they receive pre-approval to avoid missing out on fast-selling properties, especially at auctions.


Staying alert in a competitive market

The property market has been firing on all cylinders in the past year, with phenomenal growth in housing finance. While owner-occupiers were the early drivers of this boom, ANZ Research figures have revealed that investor lending also surged by 55.0 per cent over the six months to June and more than doubled since June last year.

While the end of lockdown could unleash pent-up demand, brokers could expect the housing market to cool in the coming months due to higher mortgage rates, deteriorating affordability, and the potential for macroprudential tightening.

Until then, buyers could continue to face a highly competitive market as vendors field multiple offers on every property due to low supply. Those who are not finance-ready could be at a disadvantage due to the high volume of buyers competing for limited stock.

As such, brokers have an essential role to play in ensuring that their clients secure finance approval in a timely manner to increase their chances of making their great Australian dream come true.

In this busy climate, it is more important than ever for brokers to be informed about housing trends and evolving home-buyer preferences so they can prepare their clients to buy or bid for the home of their dreams. 

In the October 2021 edition of The Adviser magazine, we've compiled data from across Australia to paint a picture of clients’ preferences and the loan amounts required to meet them

You can view some of the key stats, trends and themes driving the property market at the moment – to help you navigate what’s happening across the nation here.

The Great Australian Dream: What does it look like?
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Malavika Santhebennur

Malavika Santhebennur

Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.

Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.


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