More than a third (35%) of homeowners are planning to sell in the next five years, with over one in ten (12%) already in the process of putting their house on the market or planning to do so in the next 12 months.

This uplift shows an increase of five percentage points in selling intentions from last quarter, and more than double the number of homeowners that were planning to sell prior to COVID-19^[1].

Despite this increase, the research found more than half (51%) say they’re actively holding off from listing their property straight away.

With 22 per cent of Australians planning to buy a first home in the next five years, competition with other buyers (30%) and a lack of supply (21%) were also cited among the top challenges for sellers.

Westpac’s Managing Director of Mortgages, Anthony Hughes, said there has been a big shift in Australian property aspirations over the last 12 months.

“Home ownership preferences have evolved since the start of the pandemic, with Australians seeking more space, peace and quiet, as well as properties which offer outdoor living like backyards and balconies.

“This is fuelling buyer demand and motivating more Australians to think about selling their current property so they can purchase a new home to better meet their future needs.

“The low interest rate environment, upbeat consumer sentiment, and improving economic outlook is also underpinning stronger seller confidence as we head into 2021. This will no doubt be welcome news for buyers eagerly awaiting more homes to come on the market,” said Mr. Hughes.

According to the research, one in five homeowners are selling for reasons directly relating to the pandemic – like accommodating working from home more (11%). One quarter (25%) are also seeking more space.

Westpac Senior Economist Matt Hassan said demand for housing has surged following the improved economic outlook and is running well ahead of supply.

“It is absolutely a seller’s market at the moment. Sales have seen a big lift over the last four months and are up over 36 per cent on a year ago, resulting in a significant tightening in supply with listings across the major capital cities now at a 12-year low.

“The research suggests the situation will rebalance in coming months as more sellers come onto the market, however demand is still expected to remain strong, driving a sustained lift in prices this year and next,” said Mr Hassan.

While two thirds (66%) of sellers agree moving costs are a big barrier to selling their home, the majority (87%) of homeowners intend on making upgrades in preparation for sale.

On average, they expect to invest around $32,000 for covering things like minor repairs (44%), fresh paint (44%) and upgrading a kitchen (19%) or bathroom (19%).

Homeowners anticipate their property will be listed for about five weeks, with half (50%) expecting a private sale.

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[1] In September 2019, 17% of homeowners were planning to sell a home in the next five years, compared to 30% in October 2020 and 35% in February 2021 (Source: Research commissioned by Westpac, conducted by Lonergan Research).

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Almost half of Australians believe that COVID-19 has made them re-consider the type of suburb or area they would like to live in.

New research from Westpac shows that COVID-19 is continuing to shape Australian home ownership goals, with the number of first home buyers looking to enter the property market in the next five years doubling from 7 per cent before the pandemic to 16 per cent^[1].

No longer wanting to pay rent (54%) is the major driver for purchasing a first home, followed by seeking more stability (39%) and financial security (37%) after the uncertainty brought about by COVID-19.

Nearly half (48%) of first home buyers said they were more optimistic about entering the housing market than they were 12 months ago, due to factors like house prices (38%), low interest rates (24%) and the opportunity to live in a new area (24%).

Beyond financial reasons, the findings suggest time spent with others during restrictions has also been a motivating factor, with seven in ten (69%) of those currently sharing a roof with housemates, parents or in-laws now determined to get a foot on the ladder. A third (32%) of prospective buyers are also seeking a sense of independence through home ownership.

Westpac’s Managing Director of Mortgages, Anthony Hughes, said the research shows young Australians are increasingly seeking the sense of independence and stability that home ownership provides.

“It’s encouraging that so many Australians are thinking about home ownership despite some of the challenges brought about by the pandemic.

“It’s also interesting to see this is now largely being driven by Gen Z, who after being cooped up at home during restrictions are now ready to leave their housemates or parents behind for a place of their own – many of whom might not have considered this a possibility prior to COVID-19.

“Even though younger generations have been some of the most financially impacted this year, it’s positive that many have really used this time to take stock of their finances and get serious about their long-term goals.”

The research also found that almost half (48%) of Australians believe that COVID-19 has made them re-consider the type of suburb or area they would like to live in. This number increased to 59 per cent for younger age groups^[2].

The top locations first home buyers identified they would like to buy in are:

• Sydney – western suburbs located within 10km from the city centre, like Ashbury and Marrickville.
• Melbourne – eastern suburbs located 20-40km from the CBD, like Mitcham and Croydon.
• Brisbane – Brisbane CBD and inner-city suburbs up to 20km out, like Chermside and Zillmere.
• Adelaide – southern suburbs located about 10-20km from the CBD, like Bedford Park and Bellevue Heights.
• Perth – northern suburbs located within 10km from the city centre, like Dianella and Nollamara.

“While we’re seeing an increasing interest in properties that offer more space, there’s still a strong desire from first home buyers to live somewhere that’s still only about 20-30 minutes away from the CBD,” Mr Hughes said.

“With a younger generation of buyers emerging, many are also weighing up areas that would enable them to maintain a certain lifestyle, like Sydney’s Inner West which is in close proximity to social hubs and nightlife, while also catering to changing needs like the ability to work from home more.”

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[1] In 2020, 16% of Australians were planning to buy a first home in the next five years, increasing from 7% in 2019.
[2] 59% of Gen Z said COVID-19 has made them reconsider where they’d like to live, compared to 48% nationally.

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