First Home Buyers - 16 Sep, 2020

How COVID-19 is changing Australian home ownership goals

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This year’s lockdown as well as a new work and study from home lifestyle has radically changed what we want in our homes and where we want to live.

By the end of March 2020, most of us were in some form of lock down to try and contain the spread of coronavirus which had already wreaked havoc in countries across the globe. Aussies were encouraged to stay home to save lives, and for many of us, this meant vying for a semi-private place to get our work or study done at home. It bought a lot of unexpected positives, including no more daily grind commuting through heavy traffic, to a greatly relaxed pace to life and a lot more family time.

Couple sitting on couch watching kids play on the floor of their new home

The stay at home directives also impacted leisure time; at some stages we’ve been directed to only leave our homes for one of a few essential activities. Likewise, entertainment and hospitality venues were either closed or limited to take away only. Even after restrictions relaxed, there were limits on how many patrons venues could welcome at one time, making backyards barbies and dinner parties the social events of choice.

Related: The rules in place for working from home

We now want a home that allows space for professional and personal pursuits

In the past, being close to shops, restaurants, a decent nightlife and where we work was the Holy Grail of home ownership. Generally, this translated to densely populated inner-city suburbs and smaller homes with smaller blocks or apartment living.

However, the months of working and socialising from home combined with ongoing uncertainty around how long COVID-19 may affect our work and personal lives has drastically changed what we want from our abodes according to research conducted for Westpac.

Anthony Hughes, Westpac’s Managing Director of Mortgages said Australians have spent the last few months reflecting on their living space and how it will meet their future needs, which has spurred a fundamental behavioural shift in what Aussies want in a home. He says people are now prioritising outdoor space, proximity to parks and beaches, and enough space to cater to both our personal and professional lives.

“For many of us, staying home for an extended period has changed how we use the space we live in, whether that’s home schooling from the kitchen table or setting up a makeshift office in the lounge room,” he says.

The research highlighted several new ‘hot-spots’ in our homes. The garden, backyard, study, garage and outdoor areas have all risen in the ranks from underutilised to popular hangout spots as we prioritise outdoor entertaining spaces and more internal square meterage to make room for a comfortable work-and-study-from home lifestyle.

This is reiterated in the data which shows outdoor features including a backyard (27%) and entertainment areas (18%) has risen to the top of the must have list. Likewise, having a separate study area (20%) and large kitchen (15%) topped the list of interior ‘must-have’s’.

Woman sitting at laptop with coffee mug in hand while working from home

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Unsurprisingly, where we want to live has also evolved

Much as you’d expect, the report indicates we are now looking to suburbs with bigger blocks and houses, in lower density suburbs. Being close to parks, shops and walking tracks, or closer to the coastline or beaches also rated highly with respondents.

The stats reveal a third of respondents (34%) want to live somewhere less populated, one in three (31%) want to be closer to either parks or shops, and one in five (20%) are seeking suburbs with larger properties. More than three quarters (77%) or respondents now prefer to live in a house, compared to 22% who sought a home in an inner-city or urban area back in 2019.

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Wide scale working from home has changed employers attitudes

Westpac earlier reported COVID-19 has been the catalyst of ‘complete mindset shift’ among many employers. Formerly considered impractical if not impossible, they’ve seen first-hand how achievable working from home can be, with several studies showing employees have stayed equally or more productive working remotely.

With many employees now confident they can negotiate working from home even as a ‘hybrid’ model with a combination of on and off-site hours each week, this is a trend with heavy potential to last beyond the current pandemic. Even if employees are only driving in two or three times a week, a lengthy commute would no longer be a deal breaker when it comes to more far flung suburbs offering more bang for buck space wise.

Related: How to balance life when working from home

Government incentives are likely to drive refurbishments and renovations

While some may pack up and move further afield, the Government’s recently announced HomeBuilder grants are likely to see many Australians considering a major renovation to upgrade their home to better meet their needs – or starting a new home build to cater for their changing lifestyle. The deets?

Smiling couple holding blueprint for their home that is being renovated

If you meet the eligibility criteria, you can apply for the $25,000 grant between now and December 31, with the work contracted to start within three months of the contract date.

Related: Federal government package offers $25,000 grants to home builders, renovators

Grants must be spent to:

  • Purchase an off-the-plan / new home as a principal place of residence where the contract price does not exceed $750,000 and construction had not commenced prior to 4 June 2020
  • Build a new home as a principal place of residence valued at up to $750,000 (including land); OR
  • Substantially renovate an existing home as a principal place of residence, with renovations valued at between $150,000 and $750,000 and the dwelling not valued at more than $1.5m before the renovation.

And what are the eligibility criteria? Applicants will need to satisfy they are the owner-occupier (the registered proprietor of the land – which will need to be their principal place of residency), not a company or trust, be aged 18 and be an Australian citizen at the time of application. If you’re applying as a couple – which you’d need to do if the property or land title is held in both names, you’ll need to lodge a joint application, and both meet the eligibility criteria. 

Income is also assessed as part of the grant, so you’ll need to rustle up your tax returns – you can elect to use either your 2018-19 or 2019-20 financial year return.  Your income must be below one of the following two income caps to be eligible: 

  • $125,000 per annum for an individual applicant, or
  • $200,000 per annum for a couple based on their combined 2018-19 or 2019-20 taxable income.

It is important to understand rates are at an all time low, so it is wise to consider how any additional borrowed funds may affect your repayments in the longer term (the minimum spend on renovations is $150,000, so you will need to chip in $125,000 of your own money for a renovation of this cost, for example.)

Words by Melanie Hearse

Sources:

Backyards, beaches & balconies: Westpac reveals how COVID-19 is changing Australian home ownership goals

Going bush: WFH ‘biggest leveller’ for the regions 

Federal government package offers $25,000 grants to home builders, renovators

Whether you decide to adapt your own home or move to a place that already meets your changing needs, eChoice can help you navigate your options.

Compare your interest rate today.

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