A majority (84%) of next-home buyers (NHBs) are taking steps to better educate themselves on home financing in preparation for their home-ownership journey, according to the latest Westpac Home Ownership Report.
NHBs are home owner-occupiers who are considering or prioritising buying a new home, upsizing or downsizing.
NHBs are learning about the topic in different ways, according to the report. Seventy-three percent of them are seeking the help of professionals. Forty percent are using digital resources to understand better what is involved with buying or financing a home, while 43% claim that they are financially confident.
However, findings show that there could also be room for improvement among the pool of property players. Almost half (49%) of NHBs did not know exactly what equity is, and 48% did not know exactly what an offset account is. Forty-one percent of NHBs, meanwhile, did not precisely know the concept of refinancing.
“It’s encouraging to see the majority of home buyers are already making the most of available resources to get up to scratch on key home loan concepts. However, more can be done to ensure Australians are fully equipped to achieve their home ownership goals,” said Will Ranken, Westpac’s general manager of home ownership. “With the right help and guidance, the process of buying a home can be incredibly rewarding. It all starts with an open and frank conversation with a professional to identify any knowledge gaps.”
Westpac’s research also revealed that a lot of NHBs are apprehensive about purchasing at an auction. Fifty-six percent admitted that they were too scared, while 46% were unsure if they knew what to do.
Auction numbers have dropped over the last year against a cooling market, but recent figures showed a rise in the number of homes taken to auction. Clearance rates held above 50% for the first time since September.
“Auctions can be daunting, but again, by doing their homework and being well-prepared, home buyers can feel confident to make the most of current opportunities. To ensure the best chance of success, home hunters should observe several auctions before they bid; thoroughly research the property they’re interested in, and ask the selling agent for comparable sales,” said Ranken.
Researching to understand other loan services available to prospective buyers, such as a bridging loan or portability loan, is also essential, according to Ranken.
“A portability loan can be a great time-saver, particularly when already dealing with the emotional stress that can come with moving home. A bridging loan could also be an option if they want to stay in their current property while they build a new home,” he said.
