suburban melbourne
Image – Canva
  • 80% of buyers still say the amount they were prepared to borrow is sthe biggets factor when pruchaisng a home
  • Fewer prefer a house over an apartment compared to 2021
  • Also, less desirable to live in a regional area

New research from the National Australia Bank (NAB) has found that borrowing capacity tops the list of what’s the most important factor when purchasing a home.

Eight in 10 property professionals surveyed said the amount buyers were prepared to borrow was the biggest factor, an increase from 74% a year ago, suggesting interest rate rises  have made borrowers rethink their priorities.

The survey also found the old adage of ‘location, location, location continues to hold. 60% highlighted that good local shopping, restaurants and other amenities are paramount.

House size increased in importance from 50% to 57% compared to 2021. This trend has been seen throughout the pandemic, partly fuelled by the working-from-home boom.

However, fewer highlighted buying a house over an apartment (45% down from 53%), land size (44% from 52%), having a study or work area (215 from 26%) or being located in a regional area (16% from 21%).

Factors homebuyers consider most important when deciding to buy a property

homebuyers factors
Source – NAB.

Andy Kerr, NAB Executive Home Ownership, said the market is witnessing a shift, with Australians reconsidering affordability with higher interest rates.

“A trend we are seeing emerge from the pandemic is more Aussies considering apartments over houses for the first time since the survey began, driven by return to office working and caution on borrowing amounts,” Mr Kerr said.

“Affordability and rising interest rates are absolutely part of the equation for home buyers. In a rising rate environment, where people are uncertain on when the rising rate cycle will end, Australians are more cautious on what they can afford.”

Factors by state

factors by state
Source – NAB

Mr Kerr added it is important to remember that banks have to ensure customers can appropriately manage their repayments in the event of increased interest rates.

“We know there are some people who are feeling the pressure of rising interest rates. For anyone who is concerned please get in touch with your bank, we are here to help,” he said.

“Australians are also starting to think about what the balance of their working week will look like as we return to the office more often.

“Location is still one of the most critical buying factors and flexible working is here to stay, so where Aussies buy continues to be important. We all love walking to our local café or shops and this has continued to be a trend in the survey.”

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