This article is from the Australian Property Journal archive
SENTIMENT have almost lifted to pre-pandemic levels as optimism surges for house prices and homeowners COVID-19 concerns are diminished.
According to ME’s latest Quarterly Property Sentiment Report from October, 38% of Australians in the property market said they felt ‘positive about the market, just 4% lower than last year’s 42%.
During the height of the pandemic’s impact positive sentiment dropped to 29% in April of this year. In Sydney especially, positive sentiments were at a low of 29% in June and have since risen to 42% in October.
65% of Australians believe house prices where they live increase or stay the same, with only 20% expecting them to decline over the next 12 months. These numbers were at 46% and 41% respectively in April.
“This is really promising and indicates that despite volatility in the market, Australians have a resilient mindset when it comes to property,” said Andrew Bartolo, head of home loans at ME.
In April 64% of homeowners were worried about the value of their property falling in general, this has fallen to 49% in October.
Likewise, in June 31% were worried about paying back their home loan once deferrals end, this has fallen marginally to 29%. Furthermore, 90% of homeowners thought of housing affordability as “a big issue” last quarter, compared with 88% agreeing in October.
55% of property owners or buyers say they feel more confident about buying or selling property. Though, those initially looking to buy or sell within the next 12 months are split with 57% saying they intend to delay their move until the COVID-19 situation improves and 43% saying they are looking to buy or sell ‘as soon as possible’.
Those in Victorian metro areas are most likely to buy in the next 12 months at 44%, compared to other states.
First homebuyers are the most likely group to buy, at 53% up 7% since this time last year. However, 58% say there isn’t enough market choice and again 58% say COVID-19 has made it harder to save for a home loan.
Additionally, 69% of property owners and buyers have indicated that low interest rates have made buying or investing in property more attractive to them.
Invest sentiments have also turned more positive, increasing from 34% in April to 43% in October, just 8% below levels at the same time last year. 54% of investors said “more supply in the rental market together with falling rents hadn’t delayed their investment plans”.
65% of those in the property market agreed when asked if landlords will need to drop rents to attract tenants. With the same question increasing to 78% in Sydney and 73% in Melbourne.
“Despite the challenges of the current rental market, investor sentiment appears resilient and on the road to recovery. There are many factors at play, but with the residential property being a prudent investment vehicle and low interest rates, investors seem prepared to weather any property market fluctuations that may occur as the COVID-19 situation evolves,” said Bartolo.
Australians in the property market still believe that ongoing working from home arrangements will lead more to buy in regional areas, at 78% in October compared to 68% in June. With more saying they would consider buying in a regional area themselves, at 50% compared to 45% last quarter.
