HASI: national housing sentiment 2014

The financial position of Australians has improved in the past six months, according to the results of our annual Housing Affordability Sentiment Index (HASI).

It shows 60% of Australians believe their household savings are in a better position now than they were in 2012.

Gen Y is more positive about their finances than other generations – but they are getting some help from mum and dad, with 16% offered financial assistance to buy their first or next property.

Gen Y is more positive about their finances than other generations.

Overall, Australians are feeling less positive about housing affordability this year than in 2013, with 63% saying affordability had deteriorated and 59% expecting this to continue.

But we’re not letting our home ownership dreams hamper our love of travel. HASI shows 77% of home owners who were hoping to buy another property also wanted to travel overseas in the next five years.

HASI tests Australians sentiment towards housing affordability by measuring four key areas which impact attitudes towards the property market. These are:

• Experience of financial position
• Experience of affordability
• Outlook on financial position
• Outlook on affordability

The mean (or average) ratings across these areas is used to calculate the index.

This year’s results show sentiment towards housing affordability has returned to 2012 levels.

Read more: National housing sentiment: 2013 

Gen Y

While they might face many property challenges, on average Gen Y are more positive than other Australians.

On average Gen Y are more positive than other Australians.

They report a positive shift in their financial position and their household savings, as well as their incomes, bills and expenses.

And HASI 2014 shows 53% of Gen Y are already property owners (up 5% from 2013), with 23% owning investment properties. Time to dispel the myth this generation isn’t able to control its financial destiny?

Read more: Gen Y: are they the new property moguls?

Sacrifices

As with other years, a pool was the property feature most likely to be sacrificed, with 65% saying they would go without a pool if it meant they could afford to buy the property.

Next on the list was multiple bathrooms (35%), a lack of need to renovate (29%) and a spare room (29%).

When it comes to location, four out of 10 respondents said they would not buy or build more than 10kms from their ideal location.

Those looking to buy or build were prepared to go without recreational vehicles, luxury items and car upgrades but they were less likely to scrap their overseas holiday.

National outlook

More than half of respondents believed housing was less affordable in Australian than in other countries.

Sentiment improved in 2013 but declined significantly in the past 12 months, driven by a deterioration in housing affordability, with HASI now sitting at 4.4.

Sentiment improved in 2013 but declined significantly in the past 12 months.

While their financial position had improved, 63% of Australians felt housing affordability had deteriorated in the past six months – and about 80% said prices in their local area influenced their views on housing affordability.

Here’s the state by state break down on views on affordability:

ACT

In ACT, residents’ sentiment towards housing affordability has slightly improved over the past two years.

The HASI now sits just higher than the national average at 4.7, with the positive shift driven by improving experiences of housing affordability as well as a more positive financial position.

NSW

Sentiment in NSW has slid back to 2012 levels, with the HASI sitting at 4.3.

Six out of 10 NSW residents reported their financial positionhad either improved or remained stable this year, but 64% said housing affordability had deteriorated.

NT

Northern Territory residents are also feeling less positive, with the HASI dropping back to 4.3.

NT residents reported a negative shift in their household income in 2014, but there was a positive shift in their household bills and expenses and debt levels. Indeed, 69% of NT residents said their household savings had either improved or remained stable.

QLD

Sentiment towards housing affordability declined significantly in the Sunshine State, with the HASI now at 4.4.

Queenslanders said their financial position remained relatively stable, but 81% reported an increase in their bills and expenses.

SA

Sentiment also declined significantly, with a HASI of 4.2 and well below the national average.

While about eight of 10 SA residents reported an increase in their household bills and expenses this year, only 31% reported an increase in household debt.

TAS

In Tasmania, sentiment was stable compared with 2012 and is on par with the national average at 4.4.

HASI shows a significant positive shift in the financial position of Tasmanians this year, but they expect a negative shift in the next six months.

VIC

In Victoria the HASI stayed much the same, and is sitting at 4.4 alongside the national average.

About 67% of Victorians noted declining housing affordabilitythis year, with 60% expecting this trend to continue. But 58% said their financial position had either improved or remained stable and one fifth had reduced their household debt in the previous six months.

WA

The West rounds out the third state where the HASI matches the national average.

WA residents’ outlooks on housing affordability and their financial position remained stable, with about 27% reporting an increase in their household savings.