The National Australia Bank (NAB) Consumer Sentiment Survey for the second quarter of 2021 (Q2 2021) has revealed that relative to the previous quarter, perceptions about rising costs of mortgages increased in Q2 to 14 per cent, up from 4 per cent in Q2 2020 and 12 per cent in Q1 2021.
Tasmanian consumers led the states, with 27 per cent citing mortgage costs having changed, followed by NSW/ACT (16 per cent), Victoria and Queensland (13 per cent), Western Australia (12 per cent), and South Australia/Northern Territory (7 per cent).
In addition, 17 per cent of consumers surveyed said the cost of mortgages added most to cost of living pressures, up from 13 per cent in Q1 2021 and 14 per cent in Q2 2020.
Across the states, 20 per cent of Western Australians responded that their mortgage added most to cost of living pressures over the past three months, followed by Tasmania and Victoria (19 per cent), Queensland (17 per cent), NSW/ACT (16 per cent), and South Australia/Northern Territory (14 per cent).
Expectations for making major purchases in the next 12 months such as residential property jumped across Tasmania and Western Australia (up 19 points and four points, respectively), where consumers responded that they have positive intentions to buy residential property.
However, the score for expectations to buy residential property declined in NSW/ACT and South Australia/Northern Territory (down six points), and remained stable in Victoria and Queensland.
Expectations to buy investment property in the next 12 months plummeted by 19 points in Western Australia, while they also fell in Queensland (down 10 points), Victoria and South Australia/Northern Territory (down eight points), and NSW/ACT (down six points). Tasmania remained stable.
Expectations to undertake home renovation dipped slightly in NSW/ACT (down two points) but increased in Queensland (up 17 points), Victoria (up 11 points), South Australia/Northern Territory (up 10 points), Western Australia (up seven points) and Tasmania (up six points).
The cost of renovations has increased due to a shortage of building materials, including timber, bricks and windows, according to NAB, with the HomeBuilder scheme acting as a contributing factor.
A total of 14 per cent of all survey respondents said that home improvements added most to cost of living pressures over the past three months, down from 15 per cent in Q2 2020.
Consumer perceptions about the extent costs have changed over the past three months increased for home renovations, up from 31 per cent in Q1 2021 to 36 per cent in Q2 2021.
Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.
Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.