While a majority of borrowers are still cautious about leaping onto the property ladder, buyer sentiment is on the rise.
According to the latest Commonwealth Bank of Australia and MFAA Home Finance Index, Australian households are at their highest levels of financial confidence since May 2011.
The survey of 1,447 people also found 51.7 per cent of home buyers believe that now is a good time to buy a new home, compared with 36.1 per cent six months ago.
Fewer respondents feel financially worse off in March 2012 (35.1 per cent) compared with 38.8 per cent six months ago.
But while home buyers are looking to enter the market in the near future, almost 50 per cent said they were still not sure about which particular mortgage product was best for their needs and circumstances.
Of those who did have a clear preference, 29.1 per cent said they preferred a variable loan, while 16.9 per cent preferred a fixed loan rate.
MFAA chief executive officer Phil Naylor said the renewed confidence of home buyers is a positive indicator for the mortgage market.
“The trend we see in confidence and personal savings will only increase the desire and ability of more first home buyers to enter the housing market,” he said.
“While the cost of living pressures and employment uncertainty are placing a strain on some households, these concerns are balanced by positive factors such as lower house prices and interest rate cuts.”
Seven out of ten respondents (67.3 per cent) said they thought house prices would remain stable or increase in the next quarter compared to just 53.6 per cent in the previous survey in September 2011.
Source: The Adviser