Global buyers wary to re-enter housing market
A new global survey suggests that home buyers around the world are poised to re-enter the housing market, but property market instability and worries about their personal finances are holding them back.
The International Mortgage Trends Report, commissioned by Genworth Financial and conducted by independent research firm RFI, is a new global survey of current and aspiring homebuyers aimed at gaining local insight into key world markets. More than 9,000 respondents across five continents in eight countries were interviewed. Countries surveyed were: Australia, Canada, India, Ireland, Italy, Mexico, the United Kingdom and the United States.
"As the world's only global mortgage insurer we saw an opportunity to examine global market forces influencing the decision to purchase a home," said Kevin D. Schneider, president of U.S. mortgage insurance for Genworth Financial. "We hope the findings in this report help to encourage a deeper understanding of the challenges that are likely to shape business strategies in the near to medium term as well as provide the mortgage industry in all markets with insights that help identify future opportunities for business growth."
Of the many factors that influence the decision to buy a home, consumer confidence is one of the most important. Survey responses indicated that concerns about the rising cost of living, property market instability and the impact of government-led austerity measures have eroded home buyer confidence in some countries, and have led consumers to adopt a wait-and-see attitude. Survey respondents in the United Kingdom, for example, say they will not actively enter the housing market this year. Some other key findings:
- Consumers in many countries are more concerned about personal finances than their nation's economies. While countries with somewhat less developed economies tend to be more optimistic about their respective nation's finances than countries with more established economies, those concerns were secondary to survey respondents' fears about their own financial affairs.
- Comfort with indebtedness colors how households around the world view their financial situation as well as their approach to buying a home. Borrowers in India and Mexico stay out of debt by accumulating savings while living with parents and grandparents. People surveyed in those countries tend to be more concerned about housing affordability. Survey respondents in the U.S., U.K., Ireland, Canada and Australia are more apt to be comfortable with higher levels of debt. Respondents from those nations are less concerned with housing affordability than the impact of rising utility costs and gasoline prices.
- Despite worries over personal finances, survey respondents in many countries saw clear opportunities in the property market for those who could afford to buy.
- There was widespread support of mortgage insurance for all types of property buyers including investors and repeat homebuyers. Consumers around the world appear to have an increased awareness and understanding of the value mortgage insurance provides in helping them purchase a home sooner with a lower down payment.