Housing – what people really want

People who are planning to buy a property for rent or for future investment should know what most people are now looking for. It might have been a “Great Australian Dream” but having a home in the suburbs is no longer what most Australians prefer.

Ben Weidmann and Jane-Frances Kelly of the Grattan Institute wrote What Matters Most? Housing Preferences Across the Australian Population, on Australian’s housing and location priorities. The survey was conducted with 706 Australian residents from nine demographies and some results were surprising.

Buyers are now more concerned with convenience and access to friends, family and other establishments rather than house features. It has long been presumed that living in a separate house on a large block of land is the Australian dream however it only ranked 5th and 20th most important variable.

The top ten results for all age groups were mostly all about location as safety for people and property came in second, near family and friends, third; near local shops, sixth; near a shopping centre, seventh;  near a bus, tram or ferry stop, eighth;  and little traffic congestion tenth.

Weidmann, the co-author said, “While it is true that the number of bedrooms was the highest priority, aspects of location including security and proximity to friends and family are also clearly important.”

“The data also suggests that there are real differences in priorities across the population.

“In particular, while young families were focused on house size and type, older and single-person households were much more likely to think that characteristics of where they live are more important.”

An excerpt from the report says, “With Australia’s population changing, understanding this link between housing preferences and demographic characteristics has become more important. As is well documented, Australian households are shrinking, and the population is ageing. The fastest growing household type is ‘single-person over 65’, and the ABS expects that by as early as 2013, couples without children could overtake couples with children as Australia’s most common household.

The study wants to answer some series of questions like, “do growing population segments demand types of housing that are not prevalent in the current stock? Is our housing stock a good match for future demand? Is the design of the housing market conducive to delivering the mix of housing types in the locations that our changing population requires?”

Of course location and style of property is also of great interest to lenders and sometimes their preference runs contradictory to the individuals.  Small studio apartments continue to be difficult to finance – as a mortgage broker even with over 20 lenders on our panel we often have to pass, on these deals especially if LMI is involved.

Image sells – but may not be all they seem

While Peach pioneered virtual loan processing maybe some virtual services go too far.   According to recent article in news.com.au, the tricks real estate agents do to market certain properties may be indirectly affecting property prices they get.

Real estate agents are known to not only sell the property but also sell people’s dreams to them.  Now some real estate agents do this by adding virtual furniture, a practice that is not illegal and may be  enough to take a hesitant buyers  over the line.

A property’s price and location aren’t the only things the real estate agents find significant in making a sale that is why some companies hire experts in computer image modification  to spice up what is otherwise a blank room.

Beds, chairs, tables, television, plants and portraits are added to pictures at a significantly lower price than going out and renting furniture or hiring the services of interior designers. Virtual furnishing has been done by some very well known companies and since its introduction in February, virtual furnishings has by far increased its popularity.

The news.com.au article reported a spokesman for McGrath Real Estate saying, “The value of the product is that it draws more people to the open house which translates into a higher price. It has an indirect effect on the price of the property. I’m sure there are cases in which some buyers feel uneasy because that’s not what’s displayed in the ad. We have labels on advertisements that say ‘virtually furnished’. We feel our buyers are used to it.”

Douglas Driscoll, Starr Partners CEO said that virtual furnishing isn’t something potential buyers appreciate.
Buyers have been disappointed to find the property very different from what was advertised with some saying the practice as going “too far”.

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