The combination of high prices and interest rates is seeing affordability become extremely stretched at a time when cost-of-living pressures more generally are also constraining incomes, according to a recent Westpac Survey.
In response, would-be buyers are pushing the timing of their planned purchases back – less than 10% expect to transact in the next 6mths, the lowest share across all survey waves.
The prospective flow of first home buyers is showing the biggest response to these pressures, planned purchases down materially on last year. Just 2% of those surveyed expecting to become a first time owner in the next year.
Outside of the first home buyer space the story looks to relate more to the interest rate situation. Prospective investor buyers have pared back plans for the next six months.
And sales results for this weekend confirms the slowing market, despite some properties still exceeding reserves in some places. As reported in the AFR, the prospect of interest rates staying high has spooked many buyers, making them less likely to spend above their budgets.
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