Home buyers are paying more for homes they’re not actually interested in, according to a survey by property research firm BIS.
The survey of 5,000 homebuyers, conducted by real estate company BIS, found they’re paying $2,000 more per square metre for homes that are “too expensive”.
They’re also spending $2.2 billion more on homes they don’t want.
But what does this mean for you?
What are the downsides of buying a home?
Read moreRead moreThe survey, conducted between February and June last year, found: If a buyer has an average disposable income of $50,000 a year, the average price of their property would be $5.3 million (a 10 per cent increase on the year before).
The median price of a home is $1.1 million.
If a home buyer’s average income is $50.00, they would spend $4.9 billion more.
The average cost of a property is $3.5 million.
If a homebuyer’s average is $10,000, they’d spend $2 billion on their home.
So, if a home seller was willing to pay more, how much would you pay?
The average homebuyee would pay $1,600 more for a house, according a survey of 1,000 respondents conducted by property consultancy Redfield and conducted by the National Australia Bank.
But the average buyer was not willing to give up $2 million to buy a $5 million house.
“If you buy from a person who’s willing to do it for you, they’ll tell you if you can afford to buy that much,” said BIS chief economist Simon Kuper.
It’s not the end of the world if you want to live in a property with a smaller garden, he added.
A bigger garden means you have a bigger yard and less space to move around and “that could be a great thing”.
“But if you do a lot of other stuff on your house that you wouldn’t want to have to move into a bigger space because of that extra space, then you might have to go out and buy a smaller house,” he said.
Buying a smaller home will save you money over time and make you more happy in the long run.
But it won’t mean you’ll always be able to afford a bigger home.
“People who are buying smaller homes in the longer term will end up buying more expensive homes,” Mr Kuper said.
“And you’ll probably end up having to sell more than one house in the process.
That’s not ideal, but you’re paying for the opportunity to live here, and you’ll end up owning a bigger house in a longer term.”
The BIS survey also found the average owner of a smaller property would spend around $500 less than the average homeowner in the same size property.
“A lot of people would probably buy the smaller property because they are able to save money, but they’ll probably also end up being less happy with the experience of living in a smaller place,” he added, explaining why people might choose to move to a larger home.
“It may have a greater number of bedrooms, it may have fewer bathrooms, it might have a larger garage, it’s not necessarily the most attractive home, but it’s the cheapest house that’s available.”