Looking at real estate has become a national obsession. If we’re not gazing at pictures of perfectly arranged living rooms online or checking up how much our house is worth, we’re watching renovation shows on the television. Even when we’re not in the market to buy a new home.
According to new research by HSBC bank, Australians clock up an average 2.5 hours a week preoccupied by the property market – more than twice the time they spend at the gym (1.08 hours) or speaking to parents (0.88 hours).
The research, which makes Australians the seventh-highest property obsessed nation in the world, demonstrates that a cooling housing market is doing little to dent our property fixation.
Property extremists (6 per cent) have taken their obsession one step further, spending more than seven hours viewing property each week.
They feel the time invested in researching properties pays off, with three quarters (74 per cent) saying they feel “relaxed” about buying property and almost four in five (79 per cent) feeling “in control”.
House hunters are even putting off having a baby (8 per cent) or delaying marriage (6 per cent) to get on the property ladder, the survey of 11,932 adults across the world found.
Looking at real estate is more than just research – it’s an investment opportunity, a hobby and entertainment combined
Alice Del Vecchio, head of mortgages at HSBC Australia, said some home buyers are taking their passion for the perfect house to the maximum.
“An industry of property magazines, TV programs and websites has made it harder than ever to have realistic expectations about what you can afford,” he said.
“Many Australians are putting off important early life stages, such as having children, in the quest to afford the perfect property,” she says.
Not much will stand in our way when it comes to purchasing real estate, either.
Rumours of a house being haunted would only deter 21 per cent of buyers, while “difficult” neighbours are the biggest deal breakers in the quest to find the perfect home (46 per cent).
PRDnationwide’s national research manager Dr Diaswati Mardiasmo believes people have become so consumed with real estate because it has traditionally been recognised as a wealth building strategy, which piques everyone’s interest.
“Property will always be a hot topic at the dinner table with friends,” she said.
“We’re also obsessed with renovations and creating a dream home that suits our lifestyle.”
Our preoccupation is also fuelled by the fact that the internet has put real estate at our fingertips at any time of the day, Australian Property Institute chair Tyrone Hodge says.
“The voyeurism element of real estate also gives us permission to view inside other people’s homes and what they’ve done them, which we all love,” he says.
“Looking at real estate is more than just research – it’s an investment opportunity, a hobby and entertainment combined,” he says.
However, our obsession can often be detrimental to success, as time is a key component to capital growth, according to property expert Leonie Fitzgerald, of Wealthology Australia.
“Our own research shows that 56 per cent of our clients procrastinated for at least six months before signing a property contract,” she says.
“People simply don’t want to fail. It’s easier to do nothing than it is to be decisive,” Fitzgerald says.
Melbourne buyer’s advocate Emily Wallace says purchasers often spend hours scrolling through online real estate platforms.
“Many buyers enjoy the online research element but that excitement soon turns to confusion and exhaustion after a few Saturdays spent going over properties, and their judgement becomes clouded,” she says.
There’s a fine line between looking at real estate for research purposes and entering a zone of obsession, Wallace warns.
“If you spend too long caught up on researching, you may never take the leap to purchase.”
Land developers call bottom of property market
Land developers AV Jennings and Villa World have called the bottom of the property cycle after a year of slumping sales and consumer caution blew a hole in their profits.
AV Jennings said the current property cycle has “bottomed” and that it will deliver a stronger result next financial year, after its profits were cut in half to $16.4 million by wary homebuyers steering clear of big commitments.
“General market sentiment is clearly beginning to improve … a modest uptick in visitor numbers to sales offices and online is evident and is expected to be sustained during FY20,” AV Jennings said.
Villa World chief executive Craig Treasure said soft consumer sentiment, tight credit conditions and the uncertainty caused by the federal election had created “difficult headwinds”.
“We are seeing that sales enquiries have started to improve across Villa World’s projects, however buyers remain cautious,” he said.
Villa World’s profit after tax of $23 million was also shredded compared to the previous year when it earned $43.6 million.
“This result is consistent with commentary disclosed to the market since December 2018 and reflects the decline in the Australian residential housing market and softer consumer sentiment,” Mr Treasure said.
Villa World’s land projects are concentrated in Queensland and Victoria.
All metrics for the group suffered: earnings per share were down 48 per cent to 18.2c, total revenue fell 11 per cent to $391.6 million, and sales numbers slumped to 870, down from 1788 the previous year.
The property pain was similar at AVJennings where turnover fell 20.3 per cent to $296.5 million and profits crashed by 48 per cent.
“The lower profit reflects softer market conditions, particularly in Melbourne and Sydney,” the company said.
It paid an interim dividend of 1c on 22 March and will pay another 1.5c dividend on 20 September this year.
Villa World has agreed to a takeover by AVID Property group for $2.345 per share. It will declare a fully franked dividend of 31c, as a portion of the total takeover price if it goes ahead.
Brisbane Prices Could Be Headed For Recovery
Brisbane prices are at their lowest level in the cycle, according to the latest national property clock from Herron Todd White (HTW).
The house values in Brisbane, Bundaberg, Ipswich, Rockhampton, and Toowoomba were at the bottom, according HTW.
Meanwhile, prices in Cairns, Gladstone, Mackay, Townsville, and the Whitsundays are starting to recover, the data showed.
There was momentum for the price growth in Brisbane, given that the capital city had been “bouncing along the bottom for some time now”, HTW Brisbane managing director Gavin Hulcombe told The Courier-Mail.
“I think it will be (a) steady rise, but my suspicion is in a couple of years’ time we might look back and think it (now) probably wasn’t a bad time to buy. Some areas are likely to perform better than others,” he said.
Brisbane units are also at the bottom of the price cycle, along with Bundaberg, Ipswich, Mackay, Rockhampton, Toowoomba, and the Whitsundays, according to HTW.
Apartment prices in Cairns, Emerald, Gladstone, and Townsville are already rising, the figures showed.
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