Home owner confidence survey – August 2010

BEAT Home Loans’ home owner survey is a quarterly report that offers insight into the sentiment and financial circumstances of Australia’s home owners.

August 2010 survey highlights:

• The majority of home owners expect interest rates to rise again before the end of the year, and are very worried about the impact it could have on their budgets.
• One in five would consider going as far as cutting their grocery costs if rates were to increase by half a percentage point.
• Four out of five respondents think that rates will rise, with over 60% believing that rates will increase by between 0.5% and 1.0%. A rise of 1% would add approximately $200 per month to the repayments on a $300,000 mortgage.
• Nearly half of 25-34 year olds surveyed pay over 40% of their monthly household income on their mortgages, compared with 28% of 35-44 year olds and 19% of 45-54 year olds, suggesting that first-time borrowers’ budgets are stretched the most, despite recent government assistance in the form of the first home-buyers’ grant.
• 45% of respondents indicated that rate increases were enough of a concern that they would need to consider adjusting their budgets, or even sell their homes.
• Respondents thinking about making significant purchases like a second property or renovations within the next 12 months would think twice about making those purchases if rates were to rise by another half a percentage point.

The graph below illustrates the proportion of total monthly household income that home owners spend on their mortgages.

For more details about this survey, please contact our Communications Advisor, Rebecca Sims on (03) 8635 8758.