What Australians told us about paying for a better home.
Property Linked Finance could increase investment in better homes.
Key takeaway
Property Linked Finance could
increase investment in better homes.
Monash University researchers tested Property Linked Finance with new-home buyers, owner-occupiers, landlords and renters. Here is what they found.
"PLF did not simply shift people from one financing option to another. Its availability also increased predicted uptake of upgrades and higher performance features over the next three years across all three groups.
This suggests that PLF could increase uptake, with the largest increase among owner-occupiers."
Monash University, BehaviourWorks. Financing the transition
$14.34
bn
more spent on better homes when PLF was on offer.
$25.83bn → $40.17bn. Modelled estimate across new-home buyers, owner-occupiers and landlords, not a forecast.
$14.34 billion
More people would choose a better home.
More people would choose an upgrade, or a better-built new home, when PLF was offered alongside the usual ways to pay. For existing homes, the model covered people already considering upgrades within three years.
In the simulations, spending on better homes rose from $25.83bn to $40.17bn, a 55.5% rise in investment, where PLF is available and simple to use.
PLF was the most chosen option.
PLF was the most chosen payment option in the scenarios tested.
Renters and landlords see comfort differently.
Around a third of renters said their home is comfortable. More than half of landlords said the same about their rentals. The people living in the home feel what the owner may miss.
Share saying “always or mostly comfortable”. Separate groups of people, rating different homes.
Both are ready to share the cost.
Landlords want help with the cost of improvements. Renters want a more comfortable home. The research suggests that sharing part of the charge could help balance those interests, with renters more receptive when expected bill savings justify their contribution.
Renters’ most common worry, at 51.3%, was that an upgrade could lead to higher rent. Contributions need to sit apart from rent, with safeguards against rent rises.
PLFA’s proposed renter safeguards are set out in the Reform Package.
Monash University, renter and landlord findings.
Quick approval matters.
New-home buyers and owner-occupiers valued an approval taking under five minutes well above one taking two weeks or more.
Monash University, choice experiment.
Attaching to the home was the top feature.
New-home buyers, owner-occupiers and landlords all named the charge staying with the property as PLF’s most appealing feature. Owner-occupiers also valued lower bills and getting upgrades they couldn’t afford up front.
Almost half also asked whether it could make a home harder to sell. That concern was not linked to lower appeal. People need clear information on how a remaining charge is handled when they sell.
Monash University, survey findings on resale concerns.
About the research.
BehaviourWorks Australia at Monash University: Fernanda Mata, Nick Faulkner, Brea Kunstler and Liam Smith. Funded by RACE for 2030 in partnership with PLF Accelerator.
Six focus groups with 42 people, then a national survey of 2,239 Australians: 840 new-home buyers, 558 owner-occupiers, 233 landlords and 608 renters.
People chose between ways to pay in a choice experiment. The researchers used those choices to estimate what might happen if PLF were on offer. Real take-up and spending will depend on the final offer, costs and rules.
44% of owner-occupiers, 41% of landlords and 64% of renters said they had no plans to upgrade.