QBE Barometer 2014 (PDF)Executive Summary• Property appetite among respondents remains strong despite lower consumer confidence – A cash rate at half the
20–year average is supporting a strong property appetite, with house prices and loan growth increasing (RBA) and more
Australian adults looking to buy property in the next five years (39% of the sample in 2014 compared to 35% in 2013).
• The next 12 months now less likely to be seen as the right time to buy – Since our last report in 2013, there has been a
significant drop in respondent perceptions that the next 12 months is the best time to buy (36% in 2014 vs. 42% in 2013).
Views appear to be heavily influenced by uncertainty about current market conditions and perceptions of property prices
and interest rates in the next few years.
• The May Federal Budget is delaying market entry – More than half of respondents say they intend to hold off on
buying until they see the impact of the Budget on the economy.
• There is a general expectation interest rates will rise and house prices might stall – More than half (53%) of
respondents believe property prices will continue to rise in 2014, however 43% believe prices will fall (vs. only 28% in 2013).
This may reflect the 39% of respondents who believe interest rates will rise in the second half of 2014 and 7% thinking
they will fall.
• Affordability remains a top of mind concern – More than half (59%) of respondents think property is overvalued despite
improvements in housing affordability over the past three years:
–– 65% worry foreign investment will make property unaffordable.
• First Home Buyer participation is waning – FHB activity is at near record lows as a proportion of all buyers (RBA) and
63% worry they will never be able to afford their own home. This unaffordabliity sentiment also appears to extend to all
buyers, with the majority (81%) of survey respondents believing future generations will find it harder to purchase their
first home.
• Financial stability is still a big selling point for the Big 4 banks – Existing relationships are helping to retain customers
with the majority of Mortgagors still applying for mortgages directly with their financial institution rather than through
a broker.
• Protection against mortgage payments is a low priority for those who need it most – Among respondents, only a
quarter of Mortgagors claim to have mortgage repayment protection insurance, dropping to one in five for those who
have struggled with repayments in the last 12 months.
• Australians are well ahead on repayments – 46% of respondents claim to be ahead and the rate of arrears (1.2%) is at
the lowest rate since 2009 (Fitch).
• Non-insurance remains a substantial issue when it comes to Australian property – Only four in five Mortgagors
surveyed had building insurance, however this does not appear to be a factor of income level. Rather it may be linked to
consumers’ misconceptions about actual property risk, with respondents ranking theft and fire as the highest risk to their
property, although the most common claims are for water damage due to floods or storms.
• Property insurance is undersold at time of purchase – Less than half of Mortgagors recall being offered building
insurance by their financial institution at the point of sale.
• Property type preferences are changing – Last year’s increased interest in new developments from Intenders appears
to have reversed in 2014, with existing dwellings now the property type more strongly considered and that more likely
to be purchased. The conversion from interest to purchase of new developments is less than 50%. There is also a
continuation of the outer suburb creep, with 53% looking to buy in the outer suburbs (compared to 48% in 2013 and
42% in 2012).
