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The Border Watch : October 25th 2013
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Fear of missing out infl uencing home buyer decisions SPRING peak buying season is a time when many Australians will be hoping to secure the perfect property, but new research has shown there is a perceived fear of missing out which is infl uencing the home buying process. Whether it’s family pressures, emotions or a good fi nancial deal, the research highlights some of the key reasons why people are rushing in and buying property before they are ready. The study revealed the majority of home buyers (65 percent) believe that property prices are being steered by a fear of missing out, which is causing most (58 percent) to rush in and negotiate a price before they have done their due diligence. According to the research, the fear of missing out psyche is also having an impact on buyers’ emotions with 49 percent worried that they would lose the property to another buyer. Dr Timothy Sharp, Executive Coach and Clinical Psychologist, says, “Frustration and a fear of missing out are typical reactions associated with the complexity and importance of buying a property. It is however the biggest fi nancial decision most of us will ever make so it’s crucial that the decision is a rational one.” Australian property buyers are also being motivated by various external factors when it comes to making a decision quickly: • 89 percent of subsequent home buyers admit that life events play a signifi cant part in infl uencing their property purchasing decisions, citing additional family pressures such as having a new baby and the kids starting school, as driving them to buy quickly. • 55 percent of investors admit to negotiating a price before doing their due diligence with the research revealing they are driven to buy more quickly because they believe they have found a good fi nancial deal and don’t want to miss out (30 percent). • For fi rst home buyers the top motives for making a fast property decision are because they are tired of renting (22 percent) and because they believe it is cheaper to buy than to rent (21 percent). The research also revealed that buyers are willing to pay over the odds because of their fear of missing out: • 71 percent of subsequent home buyers will pay over the odds if they need to fi nd somewhere to live urgently citing the fact that their previous property has already sold, if they are facing fi nancial impacts like requiring bridging fi nance (69 percent), or life events like a having a new baby (58 percent) as being the cause of the rush. • 52 percent of investors will pay over the odds because they really wanted the property and didn’t want to miss out. • Nearly half (49 percent) of fi rst home buyers agree they probably paid more than they should but really liked the property and didn’t want to miss out. When it came to securing a property, research respondents also indicated that they didn’t always stick to their budget. Almost one in fi ve (19 percent) subsequent home buyers admit they actually paid more than they had budgeted when they purchased their last property because they didn’t want to miss out. Amongst investors, 48 percent admit they paid more than they should have but they really liked the property. Home-Loan Repayments Calculator (fortnightly) LOAN $ 5.5 6.0 6.5 424.89 445.80 INTEREST RATE % 7.0 7.5 8.0 8.5 100,000 283.26 297.20 311.45 326.02 340.88 356.02 371.44 125,000 354.08 371.50 389.32 407.52 426.10 445.03 464.30 150,000 467.18 489.03 511.32 534.03 557.16 175,000 495.71 520.10 545.04 570.53 596.54 623.04 650.02 200,000 566.53 594.40 622.91 652.03 681.76 712.05 742.88 225,000 637.34 668.69 700.77 733.54 766.98 801.05 835.74 250,000 708.16 742.99 778.63 815.04 852.20 890.06 928.60 275,000 778.97 817.29 856.50 896.55 937.42 979.06 1021.46 300,000 849.79 891.59 934.36 978.05 1022.63 1068.07 1114.32 325,000 920.60 965.89 1114.49 1012.22 1167.95 1059.56 1222.57 1107.85 1278.29 1157.07 1335.09 1207.18 350,000 991.42 1040.19 1090.09 1141.06 1193.07 1246.08 1300.04 375,000 1062.23 1392.90 400,000 1133.05 1188.79 1245.81 1304.07 1363.51 1424.09 1485.76 425,000 1203.87 1263.09 1323.68 1385.57 1448.73 1513.10 1578.62 450,000 1274.68 1337.39 1401.54 1467.08 1533.95 1602.10 1671.48 475,000 1345.50 1411.69 1479.40 1548.58 1711.59 1619.17 1691.11 500,000 1416.31 1485.99 1557.27 1630.09 1704.39 1780.11 1857.20 525,000 1487.13 1560.29 1635.13 550,000 1557.94 1634.59 1712.99 1793.10 1874.73 1958.13 2042.92 575,000 1628.76 1708.89 1790.86 1874.60 1960.05 2047.13 2135.78 600,000 1699.58 1783.19 1868.72 1956.10 2045.27 2136.14 2228.64 625,000 1770.39 1857.49 1946.58 2037.49 2130.49 2225.14 2321.49 650,000 1841.21 1931.79 2024.45 2119.11 2215.71 2314.15 2414.35 675,000 1912.02 2006.08 2102.31 2200.62 2300.93 2403.15 2507.21 Calculated on a 25-year repayment plan. This chart is a guide only. The Border Watch takes no responsibility for the accuracy of these fi gures. Please seek professional fi nancial advice before advancing further. 536513 1764.34 1789.61 1869.12 1950.06 Ready to make your move? ANZ Mount Gambier can help. Whether you’re looking for an investment property or your children are looking for their first home, ANZ Buy Ready™ makes it quick and easy to be prepared when ‘the one’ comes along. Come in and talk to your local ANZ home loan specialist today. Matt Foreman ANZ Mount Gambier 0403 367 447 Matt.Foreman@anz.com To be fully “Buy Ready” you must apply for an ANZ home loan and complete an application form and you must receive an Approval in Principle. An Approval in Principle is an approval for a loan subject to the security being adequate. Terms and conditions, fees and charges apply. All applications for credit are subject to ANZ’s normal credit approval criteria. Over the past 15 years, ANZ has been awarded ‘Home Lender of the Year’ by Money magazine in 2012, 2010 and 2008-2005, and Personal Investor magazine in 2005, 2004 and 2002-1999. ™ANZ Buy Ready is a trade mark of Australia and New Zealand Banking Group Limited (ANZ) ABN 11 005 357 522. Australian Credit Licence Number 234527. ANZ’s colour blue is a trade mark of ANZ. Item No. 90068J 10.2013 W364907 The Border Watch Real Estate Guide, Friday, October 25, 2013 - 5
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