What are property owners concerned about in 2023?

When asked whether they were concerned that Australia would experience a recession this year, an overwhelming 73 per cent of the 1,038 respondents agreed or strongly agreed that they were concerned about the prospect of a continuous economic downturn. 

Meanwhile, only 2 per cent of respondents strongly disagreed, 13 per cent disagreed and 12 per cent were unsure if they were concerned about this prospect. 

Findings showed that the Reserve Bank’s (RBA) interest rate rise cycle is also a matter of concern, with 66 per cent of respondents saying they were “a bit stressed” at the prospects of interest rates rising further in 2023. 

Only 11 per cent strongly disagreed and 21 per cent disagreed that they are concerned over the trajectory of the central bank’s monetary policy.

In addition to rate increases and the prospect of a recession, findings of the survey also showed that rising inflation is negatively affecting the wellbeing of Australians in different ways. 

Almost nine out of 10 stated that they will further cut back on their discretionary spending this year because of inflation, while seven out of 10 respondents said inflation had eroded their household’s savings and that the issue has them hesitating about taking an overseas trip in 2023. 

Richard Stevens, the chief executive of LocalAgentFinder, said that the “health of the economy, the impact of inflation and rising interest rates” are now on top of the list of concerns among Australians. 

“These concerns translate to the property market where a reasonably large cohort believes prices will fall this year, albeit somewhat moderately,” he said. 

When it came to views on property prices, 28 per cent of respondents believe residential property prices will increase over the year, 37 per cent expected no change and 34 per cent said that property values will fall.

The survey showed that younger Australian property owners were more optimistic, with the age group more likely to believe that house prices will rise this year, compared with older property owners who were more likely to believe that prices will fall.

Of those that expected falling prices, the majority (58 per cent) expected modest declines this year, ranging between one and 10 per cent. Thirty-one per cent of respondents expected falls of 11-25 per cent, with five per cent of respondents expecting declines of more than 25 per cent.

Property owners “sympathetic” to FHBs 

Findings of the survey also showed that Australian property owners are “extremely sympathetic” to the barriers faced by first home buyers attempting to enter the market, with eight in 10 respondents believing that home ownership is out of reach for most people. 

Over four out of 10 property owners stated are personally willing to offer first home buyers a discount in a property sale.

“The fact that over four out of 10 property owners in Australia would be willing to offer substantial discounts to first home buyers points to how prevalent the issue of housing affordability is and just how sympathetic many Australians are to people confronting this challenge,” Mr Stevens said.

Of the property owners surveyed, 11 per cent indicated they were willing to provide a 1 per cent to 4 per cent discount on the asking price for first home buyers while 10 per cent of sellers were willing to offer a discount of 5 per cent to 9 per cent. 

Meanwhile, 11 per cent were willing to offer a 10 per cent discount and another 10 per cent of respondents were willing to offer a discount of 10 per cent or more to first home buyers. Rounding out the figures were the 58 per cent of respondents who said they would not take less than the asking price.

The majority of the respondents also believed that governments were “not doing enough” to help first home buyers (63 per cent) nor were they doing enough to limit foreign investment in the Australian property market (77 per cent). 

Meanwhile, around 55 per cent believed governments should incentivise retirees to downsize to help first home buyers.

Bank of mum and dad here to stay 

Another force seen to provide support for first home buyers amid the current market is the good old “Bank of Mum and Dad”, according to the report. 

Most parents surveyed wanted to help their children achieve their home ownership dreams, according to Mr Stevens. 

“People appear to want more action from governments around housing affordability, but while the problem persists, most parents are willing to step in to support their children,” he said.

Of those who wanted to help their children buy a home, 28 per cent stated they were willing to “gift money” as a deposit, 21 per cent were willing to loan money for the same purpose, and 26 per cent were open to guaranteeing their child’s loan.

Notably, 6 per cent of the respondents expressed willingness to buy a house outright for their children and 19 per cent said they wouldn’t be able or willing to help their children attain home ownership.

“It appears that the bank of mum and dad will continue to be a significant force in the economy until the affordability issue subsides or is adequately addressed,” Mr Stevens said.

Real estate agents viewed as ‘critical’ to transactions

Despite advancements in technologies such as artificial intelligence (AI), the survey also revealed the vast majority of Australian property owners believe that real estate agents will be needed in five years’ time. 

Over seven in 10 Australian property owners feel it is absolutely critical or very important to compare real estate agents when selling their property, with this proportion increasing to nearly eight in 10 for younger Australians. 

Meanwhile, the majority of respondents (52 per cent) believe that three agents should be compared before a final decision is made and many are comfortable doing so online.

Mr Stevens said that data has shown that agent selection is a very stressful process for most property sellers, highlighting that a “strong and effective” agent can not only “maximise the sale price of a property but can also alleviate some of the stress from what can be an emotional process.”

“It’s unsurprising that property owners believe there is a strong future for agents and want to invest time and effort finding the right one for their needs, be that online, in person or a combination of both,” he stated. 

What does the future hold for the market?

While property owners are “rightly” concerned about what the year holds for the real estate market, Mr Stevens noted that there is data indicating the market activity will rebound in the near future. 

“When it comes to selling property in this context and as recent listing data suggests, there are not a lot of people taking their properties to market at present. 

“However, this situation could change quickly as our internal data is showing a large uptick [8.2 per cent] in people comparing real estate agents on our platform in January this year compared to January last year. The survey also showed that two out of 10 property owners are extremely serious about selling within the next 12 months,” he remarked.

He commented that the data points indicate many Australians are currently making preparations to sell or have plans to sell but are waiting for the market to stabilise or recover before doing so.

“While the survey suggests that property owners possess a degree of fear or concern around what this year may hold, the property market has shown incredible resilience and growth over the long term and it wouldn’t surprise me if activity, and even prices, pick up sooner than some may think,” Mr Stevens concluded.