The Current Market Boom: Supply vs. Demand
At TMAP, we’ve been discussing the nature of the market this year, highlighting the anticipated aggressiveness and the impending boom. A critical factor driving this boom, particularly in its initial phase, is the lack of supply. However, an intriguing aspect is the demand side, which is equally compelling. The Westpac Home Ownership Report sheds light on this phenomenon, presenting some noteworthy statistics that demand our attention. According to the report, an impressive 44% of Australians plan to purchase a home within the next five years. This marks a significant 9% increase since July last year, indicating a strong intention to engage in property transactions during this period.
The Demand Dynamics: A Closer Look
The composition of potential buyers is changing, with a 6% rise in investors and a 4% increase in those looking to upsize. This shift suggests more investor activity in the next boom. For many, the journey begins with a smaller property, such as a unit or townhouse, before moving up to a larger, more desirable property using the equity from their initial investment. This ‘team at two-step’ approach is evident, with a notable 4% jump in individuals aiming to upsize and another 4% looking to invest in renovations.
Australian Homeownership Ambitions
The demand indicators are all pointing upwards. A staggering 44% of Australians express a desire to buy property in the next five years, highlighting a monumental shift in homeowner aspirations. This surge is accompanied by increased investor activity and interest in upsizing and renovations. These intentions reflect the mindset of Australians gearing up for what could be the biggest real estate boom of our lifetimes, driven initially by a shortage of supply but ultimately propelled by this burgeoning demand.
Location, Location, Location
The Westpac survey reveals a significant attitudinal shift among Australians, particularly first-home buyers. Approximately 75% are now willing to consider living in previously overlooked areas, a realisation borne out of the necessity to afford homeownership. This pragmatic approach is gaining traction, with 50% of potential buyers considering ‘rentvesting’—renting in a preferred location while owning property in a more affordable area. This strategy underscores a disciplined approach to real estate, recognising the importance of entering the market, even if it means adjusting expectations.
The Shift Towards Apartment Living
An interesting trend emerging from the return to office work is the increased interest in apartment living, with a 7% rise in intention to purchase units. This contrasts with a 5% decline in interest in houses, signalling a 12% swing towards more affordable housing options. This shift is a strategic move by many to align their purchasing power with market opportunities, potentially setting the stage for future property upgrades.
Conclusion: Embracing the First Step for Future Gain
The real estate market is undergoing a dynamic transformation, characterised by a significant increase in demand, changing buyer preferences, and strategic approaches to homeownership. The TMAP-2-Step concept emphasises the importance of making pragmatic, affordable choices now to achieve greater aspirations later. It’s a call to action for potential buyers to reevaluate their strategies, embrace necessary sacrifices, and seize the opportunities presented by the current market. As we witness these shifts, the message is clear: the path to achieving your dream home begins with taking that crucial first step, setting the foundation for future success in the real estate market.
