04/12/2008 - 12:08

Global crisis no turnoff for home buyers

04/12/2008 - 12:08

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Almost one third of Western Australians will buy a property before 2009 is over despite the current financial conditions prompting many people to revisit their financial plans, a survey has found.

Global crisis no turnoff for home buyers

Almost one third of Western Australians will buy a property before 2009 is over despite the current financial conditions prompting many people to revisit their financial plans, a survey has found.

The latest Mortgage Choice Consumer Sentiment survey also revealed that economic management at the federal government level has overtaken interest rates as the biggest concern.

The online survey, which canvassed WA residents in early November, found 31 per cent of respondents plan to enter the property market next year, down on last year's figure of 46 per cent.

Around 35 per cent of WA property owners said they plan to renovate their existing property rather than purchase a new one.

"Today's global financial situation has certainly affected consumer confidence but our survey results show that the slide in sentiment is perhaps not as marked as some would expect, nor is the percentage of those deterred from buying property," Mortgage Chouse senior coporate affairs manager Kristy Sheppard said.

"59% said the credit crunch has made property seem safer than shares and 31% will buy within 12 months, with 61% of these purchasing investment properties.

"Overall, housing prices are relatively steady and to many consumers the property market appears more stable than the stock market, while interest rates are falling and rental vacancies remain historically low.

"At present, a large number of regions are experiencing a 'buyer's market'. Many people recognise that and plan to take advantage of it".

The survey found that of the 79 per cent who held mortgages, 71 per cent said they will not decrease mortgage repayments to match recent rate cuts.

In comparison South Australians were most likely to keep repayments at the same level, 74 per cent, and New South Welshmen were least likely, 69 per cent.

Meanwhile, 67 per cent of all WA mortgage holders will make changes to their financial situation, and 21 per cent were not sure yet if they will

Around 62 per cent of non-mortgage holders will make changes, with 21 per cent not sure yet.

"Although high on the list of financial reassessments, it is interesting to see that less than two thirds of all Western Australians will review their budget in the next 12 months," Ms Sheppard said.

"Regularly reassessing your budget, is essential if you wish to maintain a healthy financial situation, especially for those with a large commitment such as a mortgage."

However, 39 per cent of respondents will alter their savings plans due to the credit crunch. Of these, 80 per cent will save more, 17 per cent will withdraw some savings and re-invest it elsewhere and 3 per cent will withdraw all their savings and re-invest elsewhere.

Additionally, 80 per cent of Western Australians believed interest rates will fall again between December 2008 and December 2009, the lowest percentage of any state.

Forty per cent were worried about the 2009 economy while 31 per cent were confident it would be strong.

Over half the WA respondents, 60 per cent, expected house prices to fall over the next year and 21 per cent expected them to remain stable. Only 14 per cent expected prices to rise and 5 per cent were not sure. WA respondents were the most pessimistic in this respect.

Overall, the major personal concerns for Western Australians were economic management at Federal Government level, followed by job security and other costs of living. Last year, interest rates were the most pressing concern followed by Federal Government economic management, then petrol prices, fall in housing prices and job security.

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