Genworth Financial

Streets Ahead

Genworth Homebuyer Confidence Index

March 2012 | Fourth Edition

Confidence continues to slide

A Nation divided: WA Index climbs

New South Wales confidence has increased by 1.3% and Western Australia saw an 11.2% spike. The latter was driven by stable employment levels and an improving, though still weak property market, with its residents most likely to agree that it is a good time to buy a home and least likely to have experienced, or expect, difficulty making mortgage repayments.

Queensland confidence decreased by 2.2%, and is likely driven by a continued decrease in property values, particularly in the Gold Coast and Sunshine Coast regions.

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FHB confidence grows

As at March 2012, first homebuyers (FHB) who are comfortable borrowing over 80% LVR stands at 29%, up from 20% in September 2011.

FHB confidence has increased 1.5% to 99.0, which is similar to the national confidence level prior to the GFC.

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Mortgage stress eases

The two biggest factors influencing mortgage stress are recognised as being 'a general rise in the cost of living' followed by interest rates. The last time the RBA cash rate stood at 4.25% (when the Genworth HCI was conducted) was in April 2010, although the cash rate continued on the upward trajectory throughout the second half of 2010 ending that year at 4.75%.

Interestingly, there was a 3% decrease in both experience and expectation of mortgage stress among homebuyers since September 2011.

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National confidence bounces back to March 2011 levels

Homebuyer confidence rose by 2.1% from September 2011 to 96.3 which is the same level as March 2011. The key factors driving this was a decrease in mortgage stress and Australians' increasing comfort with debt, due to the recent reduction in RBA cash rates.

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What is Streets Ahead?

Streets Ahead is a biannual report into the current and historical levels of confidence among Australian homebuyers and aspirational borrowers, based on surveys of more than 16,000 Australians between 2005 and 2012.

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