Australians want cheaper homes but mortgage holders fear further price falls

Australians broadly support lower home prices, but many mortgage holders are anxious about what further falls could mean for their own finances, according to housing research released by Westpac on Friday.

The bank’s Home Ownership Report found 68 per cent of surveyed Australians believed falling property prices would be good for the country. At the same time, 67 per cent were concerned that values could keep falling.

That tension was clearest among people who already own property. Almost two-thirds of homeowners agreed that lower prices would benefit Australia, yet 75 per cent of owners with a mortgage were worried about further declines.

The results illustrate why a housing downturn can be welcomed as an affordability correction and feared as a threat to household wealth at the same time. A lower purchase price may help a new buyer assemble a deposit, but it can reduce the equity available to an existing owner who needs to sell, refinance or move.

Westpac commissioned Lonergan Research to survey 1,165 Australians aged 18 and over between September 18 and 28. The results were weighted to Australian Bureau of Statistics population estimates.

Affordability concerns extend beyond the sale price

The survey suggests cheaper homes alone would not resolve the barriers facing aspiring buyers.

Westpac said 82 per cent of respondents believed home ownership was completely out of reach for the average Australian. Among surveyed first-home buyers, 65 per cent thought they would never be able to purchase without receiving an inheritance.

When respondents were asked what would improve access to home ownership, the most popular answer was more affordable housing in established suburbs, selected by 52 per cent. Reducing stamp duty and other purchasing costs followed at 48 per cent, while 39 per cent nominated higher incomes and wage growth.

Better transport connections to outer suburbs and regional areas were selected by 31 per cent.

Those responses matter because a headline fall in the median price does not necessarily produce a suitable or financeable home for an individual buyer. Location, dwelling type, income, upfront transaction costs and the interest rate applied to the loan all affect whether a purchase is achievable.

A buyer may find that advertised prices have fallen while their borrowing capacity has also weakened. Conversely, someone with stable finance and a long ownership horizon may have more negotiating room when competition is subdued.

Different generations see the downturn differently

Support for lower prices was strongest among younger respondents. Westpac found 78 per cent of Gen Z participants thought falling prices would benefit Australia, compared with 69 per cent of Millennials, 67 per cent of Gen X and 58 per cent of Baby Boomers.

The generational gap is unsurprising in a market where younger households are more likely to be trying to enter, while older households are more likely to have accumulated housing wealth. However, the results also show the divide is not simply between owners and non-owners, because a majority of homeowners supported cheaper housing in principle.

For sellers, softer sentiment means pricing expectations and campaign strategy require care. Buyers who believe values may fall further have less reason to rush and may be more willing to make conditional or below-guide offers.

For buyers, the survey is a reminder that waiting for the lowest possible price is not a complete strategy. Finance approval, repayment capacity, property suitability and the planned ownership period may be more important than correctly identifying the bottom of the market.

What it means for you

• Buyers should compare any price saving with changes in borrowing capacity, repayments and upfront costs.
• Mortgage holders planning to sell or refinance should check their current equity rather than relying on an old valuation.
• Sellers may need to respond quickly to comparable sales and realistic buyer feedback.
• Lower prices can improve entry costs, but they do not by themselves fix income, supply or location constraints.