Kathryn Lee - 27 Mar, 2019

Melbourne, Byron Bay top list of hot spots for home upgraders

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A new report from ING has revealed most Australian looking to upgrade to a new home are willing to head interstate – just not to Sydney.

ING’s Upgrader Homeownership Survey Report found 59% of upgraders would relocate to an entirely different state, with a particular interest in Melbourne and the NSW coast.

Where do Australian home upgraders want to relocate to?

The top 10 list included:

  1. Melbourne
  2. Byron Bay
  3. Central Coast
  4. Brisbane
  5. Adelaide
  6. Coffs Harbour
  7. Newcastle
  8. Mooloolaba
  9. Noosa
  10. Cairns

Interestingly, Sydney did not rank among the most desired locations, likely due to housing affordability. However, the NSW Central Coast was a top contender, which remains a hot spot for commuters working in the Sydney CBD.

Having said that, the majority of survey respondents did not cite work (31%) or being closer to family (29%) as the main draw cards of a new location, but rather proximity to more activities or shops (39%) was of the highest importance.

Now that we’ve covered the ‘where’ portion of the research, here are some other things to consider.

Why are people upgrading and what are they looking for?

For most people, it was simply a matter of wanting a bigger and better house. Go figure!

Space was a common issue, with 74% of upgraders looking for at least three bedrooms, while another major reason was simply a desire for something “nicer”. Children played a huge factor, with 34% of parents saying their current home wasn’t big enough for their family and they needed something bigger. A sizeable outdoor space was also ranked high in desirability.

Having said that, most were aware of the necessary give-and-take when it comes to landing your dream home. For instance, people were more likely to sacrifice on location to achieve their desired size, opting for larger homes in worse areas than vice versa.

Furthermore, upgraders were likely to move further away from work, with more than a quarter of respondents saying they’d extend their commute by half an hour or more to get their ideal property.

However, bigger wasn’t necessarily better for one cohort: empty nesters. Couples with adult or no kids were more likely to seek a downsize.

Australian home ugraders

How are Australian home upgraders financing the upgrade?

The majority (65%) of upgraders sell their current property before purchasing a new one. However, if this is your plan, don’t forget to budget for temporary accommodation.

Nearly half who sold before buying waited seven months to a year before getting into their new home. During that interim period, 30% rented, while 24% moved in with friends or family, and another 4% lived in a hotel or motel. 

When it comes to home loans, one in four upgraders are willing to increase their mortgage up to $500,000, however, on average the figure was $235,000.

Another insight from the research found that 81% of those who used a mortgage broker for their first property did or would use one again.

ING’s head of third party distribution, Glenn Gibson, told The Adviser that brokers were in a good position to help these buyers manage the (often hectic) transition of an upgrade.

“Upgraders are turning to their brokers to help alleviate some of this stress, so it’s important that brokers show empathy and prove they care about getting the best possible outcome for their client,” he said.

Finally, if you’re stressed out when it comes to saving, take a note from the upgraders who certainly aren’t cutting back on luxuries. A whopping 77% said they would continue to use Ubers and Taxis, 76% would continue having date nights with their partner, and 75% would continue to have nights out with friends.

Words by Rebecca Mitchell.

Thinking of upsizing your current home? eChoice can help you to calculate your borrowing power, compare rates amongst 25 lenders and connect you with an experienced broker who can help simplify the process of applying for a mortgage.

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