Australians are living beyond their means and overcapitalising on property purchases as the country remains in a ‘property bubble’, legal and conveyancing professionals have warned.
Sixty-seven percent of conveyancers and property lawyers surveyed believe buyers are overcapitalising and leaving themselves at significant risk, according to research by legal technology and services provider GlobalX.
Sixty percent believe the state is in Australian property bubble.
While the steady increase in value in recent years has kept buyers optimistic, the legal fraternity is increasingly sceptical about the long-term stability of continued growth, GlobalX CEO Peter Maloney said.
“Housing affordability is a generational problem in Australia and, with 65 per cent of respondents indicting housing price is now unaffordable for Australia’s middle class, we need to look at ways to rectify this escalating issue,” Mr Maloney said.
He said the industry is divided about the proposed solution to allow first home owners to access their super to purchase a home.
“[There are] 54 per cent of conveyancers and property lawyers disagreeing with the proposal, and almost 46 per cent championing the idea,” Mr Maloney said.
“There is no one solution that will suit everyone’s agenda, desires and position on this, so we need to focus on ways to reduce over-investment to avoid devastation and crippling debt if, and/or when, the property bubble bursts.”
Meanwhile, 42 per cent of conveyancers and legal professionals believe the level of foreign investment in Australia will increase.
“We also asked whether Australia should ban foreign investment to help ease housing pressure and received some polarising results,” Mr Maloney said.
“Around 47 per cent of respondents wanted to see foreign investment restricted, while 52 per cent did not see a ban as a viable solution.”
Mr Maloney said industry professionals are awaiting the next federal budget to see how the government responds to the affordability issue.
“New South Wales has been vocal in its support of addressing this issue and we are now waiting to see how this will be addressed on a federal level or by other state parliaments.”