A quarter of Aussies believe now is a good time to buy a home amid forecasts house prices will flatten later this year, according to a new report.
The number of people who thought it was a good time to splash on a home fell for the fourth consecutive quarter to 24 per cent, well down on 45 per cent at this time last year, according to NAB research.
Only one in three, 33 per cent, believed now was a good time to renovate as inflation began to bite, the latest NAB Behavioural Insight Report found.
Despite projections for slower house price growth, the number of Australians intending to buy a home in the next 12 months remained unchanged at 13 per cent in the fourth quarter of 2021.
The number of people intending to buy an investment property in the next year also was unchanged, at nine per cent.
Despite virus-related disruptions in 2021 and into 2022, the housing market remained strong, buoyed by low rates and with only brief disruptions to construction.
Overall dwelling prices rose strongly according to the CoreLogic 8-capital city dwelling price index, ending 2021 about 21 per cent higher than they started.
However the NAB predicted house prices will flatten late this year with the trend continuing through 2023 as rising mortgage rates put downward pressure on prices.
“We currently expect more subdued property pricexjmtzyw growth in 2022, with gains of around 3 per cent, compared to 21 per cent in 2021,” NAB home ownership executive Andy Kerr said.
Prices would drop 10 per cent at the end of 2023.
The pattern was expected across all capital cities but Sydney and Melbourne were tipped for the biggest falls.
But the labour market would remain strong, with wages growth picking up and interest rates still relatively low, the bank said.
NAB brought forward its expectation for rate hikes, with the first Reserve Bank of Australia rate rise tipped in August, ahead of further rises in September and November.
With rate rises on the horizon, 28 per cent of Australians believed it was a good time to get a mortgage.
Meanwhile increasing costs had made it harder to save for renovations.
One in two Australians renovating their home believed it was harder to complete the renovation in the last 3 months, with 60 per cent saying it had become more expensive.
Despite the hip pocket sting, 18 per cent intended to upgrade their existing home and 15 per cent planned to renovate a property in the next 12 months, the report found.
“Aussies are among the most active renovators in the world and love to make a home truly their own, but it’s clear rising costs have made it more difficult to budget,” Mr Kerr said
He urged people pursuing renovations to have a buffer for any unexpected costs likely to pop up.
The NAB report was conducted with about 2000 Australian adults in late 2021.
