Finance Property Property buyers seek spacious homes as FOMO kicks in

Property buyers seek spacious homes as FOMO kicks in

Property hunters are prioritising extra space as they spend more time working from home. Photo: Getty
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Property hunters are prioritising extra space to help keep the peace, as families spend more time under the same roof with more flexible working arrangements. 

Extra space is high on buyers’ wish lists amid the global pandemic, as people look for second living areas, home offices and larger backyards.

National Property Buyers director Antony Bucello said people working from home who have children are especially looking for more space.

“People who live in a house that’s only got one living area – if they’ve got a couple of kids, let me tell you, after COVID they’ll be thinking about buying a place with two living areas,” he said.

“They’re sort of saying ‘boy, we need a bit more space in case we are having to spend a bit of time together’.”

Eliza Owen, Australian research head at property data firm CoreLogic, said buyers were favouring houses over units in 2020.

It is reasonable to think that people may desire a more spacious home as COVID-19 has meant spending more time there,” she said.

This three-bedroom house in Geelong, Victoria is on the market for $849,000. Photo: Hodges – Geelong

In the year to January, 74 per cent of properties sold in Australia were houses, up from the decade average of 70 per cent. 

Ms Owen said regions with larger typical land sizes had seen higher value growth rates over the year, such as the Richmond-Tweed area of NSW, where house prices rose 12.6 per cent, and Coffs Harbour, where prices rose 11.9 per cent.

Mr Bucello said there has been a spike in interest in Victorian regional areas such as Geelong and Bendigo, as people continue to work remotely and travel into city offices occasionally. 

Demand is also outstripping supply on the Mornington Peninsula.

“There has certainly been a lot more interest in the regional markets as well as people seeking tree changes or sea changes,” Mr Bucello said.

Since February last year, before the onset of the pandemic, regional housing prices have surged 9.4 per cent while capital city housing values have risen 2.6 per cent, according to CoreLogic. 

The first-home buyer market is strong. This two-bedroom apartment in Marrickville, NSW has a guide price of $650,000. Photo: Adrian William

Mr Bucello said low interest rates and government incentives had encouraged investors to be out in full force, noting they should be mindful that tenants, not just property owners, want more space, too.

“You’d need to think hard about buying a one-bedroom apartment in the city at the moment,” he said.

First-home buyer activity is strong, particularly in the $500,000 to $600,000 price range, due to low interest rates and the fact many consumers in this bracket were able to turbocharge their savings efforts during lockdowns last year, he said.

The number of first-home buyer mortgages in December rose to its highest level since June 2009 – accounting for a third of new owner-occupier financing, according to Australian Bureau of Statistics figures.

Mr Bucello said buyers should be mindful that comparable sales often do not reflect the price a property will sell for in this climate.

“People are digging deeper and going harder, even though it’s above what comparable sales evidence would suggest is fair and reasonable,” he said.

“People are just wanting to get in – it’s FOMO (fear of missing out) – and the issue is we just don’t have enough stock and demand is outstripping supply.”

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