Fear of overpaying replaces FOMO as house prices hit record highs

Fear of overpaying for a house replaces fear of missing out as house prices reach ridiculous levels, new research finds.

In just six months, the median home price in Sydney climbed $ 129,400, as Australian home values ​​climbed at the fastest rate in 32 years.

But in a nearby Central Coast seaside suburb, home prices have jumped $ 575,000 or 68% in one year.

With house price records set in more than two-thirds of Australia’s housing submarkets, potential buyers are increasingly worried about being ripped off.

Fear of overpaying for a house replaces fear of missing out as house prices reach ridiculous levels, new research finds. Pictured is an auction in Sydney

Biggest fears of first-time homebuyers

Paying too much: 48%

Mortgage repayments: 31%

Not being able to afford a dream location: 28%

Saving exhausting for one thing: 24%

Unable to save for a deposit: 23%

Job loss and inability to repay the mortgage: 23%

Maintenance costs: 22%

Home values ​​drop after purchase: 21%

Source: Finder survey of 1,028 first-time homebuyers in March 2021

Almost half, or 48% of first-time homebuyers cited overpaying as their biggest fear, according to a Finder survey of 1,028 newcomers to real estate.

In comparison, only a third of respondents were concerned that they would not be able to pay off a mortgage.

Finder home loan analyst Richard Whitten said buyers fear paying too much to attend inspections that are open for several months instead of rushing.

“Avoid looking at the price range of auctions, however – these often end up selling for much more than they are worth, and sometimes even less,” he told Daily Mail Australia.

“Do you attend open inspections for a few months – before you decide to get a real idea of ​​the market. “

The Sydney Easter Long Weekend auction liquidation rate was 85.9%, but the Ryde area in the city’s north had an even higher success rate of 93.8 %, on par with Canberra, according to data from CoreLogic.

Melbourne’s auction liquidation rate of 75.3 percent was lower than the national average of 79.4 percent.

In March, house price records were set in 61 of Australia’s 88 statistical regions.

The value of national houses jumped 2.8% last month, the fastest pace since October 1988.

Median house prices in Sydney jumped an even more dramatic rate of 4.3% – also the fastest pace in 32 years.

In just six months, the median home price in Sydney climbed $ 129,400, as Australian home values ​​climbed at the fastest rate in 32 years.  But in a nearby Central Coast seaside suburb, home prices have jumped $ 575,000 or 68% in one year.  In the photo, a house in Copabana

In just six months, the median home price in Sydney climbed $ 129,400, as Australian home values ​​climbed at the fastest rate in 32 years. But in a nearby Central Coast seaside suburb, home prices have jumped $ 575,000 or 68% in one year. In the photo, a house in Copabana

The median price of a home with a backyard hit $ 1.122 million, marking an increase of $ 129,409 in just six months.

Other data from REA Group, the parent company of realestate.com.au, showed that 54 suburbs in Sydney, Melbourne, Brisbane and their satellite cities saw their median house prices surpass the $ 1 million mark in February 2021.

In just one year, prices in Copacabana, on the central NSW coast, jumped $ 575,000 or 68% to $ 1.425 million.

With Sydney homes increasingly out of the reach of middle-income people, one in five new borrowers told the Finder survey they would be open to buying a freeway.

The Reserve Bank of Australia left interest rates unchanged at an all-time high of 0.1% on Tuesday.

Governor Philip Lowe again pledged to leave interest rates unchanged until 2024, but hinted that he was concerned about increases in house prices, with three of Australia’s big four banks offering rates fixed mortgages below 2%.

Data from REA Group, the parent company of realestate.com.au, showed that 54 suburbs in Sydney, Melbourne, Brisbane and their satellite cities saw median house prices exceed the $ 1 million mark in February 2021. On photo, Copacabana on the NSW Central Coast

Data from REA Group, the parent company of realestate.com.au, showed that 54 suburbs in Sydney, Melbourne, Brisbane and their satellite cities saw median house prices exceed the $ 1 million mark in February 2021. On photo, Copacabana on the NSW Central Coast

“In view of rising house prices and low interest rates, the bank will closely monitor mortgage trends and it is important that lending standards are maintained,” he said.

The futures market, which bets on the evolution of interest rates, expects the Reserve Bank to raise the spot rate in 2022 instead of 2024, which in itself would be the first rate hike in the world. counting since 2010.

Even if the central bank keeps rates on hold, the Australian Prudential Regulation Authority could once again impose stricter rules on investor lending and interest-bearing lending just to cool an overheated housing market.

The Reserve Bank of Australia left interest rates unchanged at an all-time high of 0.1% on Tuesday.  Gov. Philip Lowe again pledged to leave interest rates unchanged until 2024, but hinted he was concerned about rising house prices

The Reserve Bank of Australia left interest rates unchanged at an all-time high of 0.1% on Tuesday. Gov. Philip Lowe again pledged to leave interest rates unchanged until 2024, but hinted he was concerned about rising house prices

A crackdown by the banking regulator in 2017 caused a two-year housing market slowdown after more than five years of strong growth.

With that in mind, 21% of first-time homebuyers surveyed by Finder were concerned that house prices would drop after buying their home.

Canstar Group Chief Financial Officer Steve Mickenbecker said the Reserve Bank or the Australian Prudential Regulation Authority, the banking regulator, should act sooner to stop a possible property price bubble.

“The pressure will start to rely on the Reserve Bank and financial regulators to step in if we don’t see the real estate market start to slow down in the coming months,” he said.

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