Despite further falls in prices, the number of Australians who think now is a good time to buy a home is rising. But it’s getting harder and more expensive to complete a renovation and concern around interest rate rises is lifting.

The housing market has softened further, and this looks set to continue as the impact of higher rates continue to flow through. Higher rates are expected to impact all regions, particularly where affordability constraints are most binding. We continue to see the price declines stemming from an adjustment to borrowing capacity as interest rates rise – rather than a fundamental over-supply of housing. Indeed, the rental market has tightened significantly with vacancy rates falling to low levels in all capitals through 2022.

Interestingly, against this backdrop the Q3 survey saw a sharp uptick in the number of Australians who believe now is a good time to buy a home (to 23% from 18% in Q2). Sentiment around buying an investment property was basically unchanged (at 21% from 20% in Q2).

Find all the insights in NAB Behavioural Insights – Property Insight Report (Q3 2022)