Home lending and property values are not the only things hitting a high point in 2021, with positive sentiment almost booming for those in the market, according to ME’s latest Quarterly Property Sentiment Report.
ME’s latest report, based on a national survey of 1000 Australian adults in the property market, was conducted in January, and showed a rise in positive sentiment across every state and territory, with Queensland respondents reporting the highest level of positivity.
Positive sentiment was at the highest level – and negative sentiment at its lowest – since the direct bank first started compiling its Quarterly Property Sentiment Report in 2019.
Both investors and owner-occupiers reported a substantial increase in positivity, with a rise in 15 and 17 percentage points respectively.
Additionally, almost three quarters of respondents “looking to buy” that were surveyed said stimulus measures such as HomeBuilder, first-home buyer incentives and record-low interest rates had made the notion of buying or investing in property a more attractive proposition.
Claudio Mazzarella, the bank’s Head of Home Loans and Personal Banking, said the record-high responses recorded were a reflection of the resilience of the Australian market and the range of incentives available.
Mr Mazzarella noted that challenges such as unemployment and job instability were still present but said the strong rise in positive sentiment and market gains were encouraging.
“Government incentives such as HomeBuilder and record low interest rates have no doubt been large contributors to driving momentum across the market,” he said.
Mr Mazzarella also said sentiment among investors was rebounding, with low interest rates making investing in property a more attractive option.
Conversely, an overwhelming 95 per cent of first-time buyers said housing affordability was a big issue in Australia, with Mr Mazella acknowledging rising property values would make it more difficult for new entrants to the market to “get their foot in the door”.
“It will be important for new entrants in the property market to do their research,” he added.
The majority of those surveyed envisioned values to continue to rise in 2021, with 77 per cent saying they expected property prices to bounce back this year, and fewer property owners expressed concern about COVID-19 negatively affecting the value of their property, with 43 per cent citing it as an issue, compared to 50 per cent in the previous report.
More than half of respondents – 54 per cent – of property owners and buyers predicted prices would go up and only 7 per cent said they expected them to go down. Owner-occupiers reported the highest expectations for price increases, at 57 per cent.
With social restrictions arising from COVID-19 creating limitations for auctions and inspections over the past 12 months, Australians also appear to be eagerly anticipating the opportunity to make up for lost time, with 78 per cent of report respondents saying they “expected more residential real estate activity this season to make up for last year”.
Those who said they intended to buy or sell property in the next 12 months also indicated they were eager to do so “as soon as possible” (up 4 percentage points to 47 per cent) and fewer said they were in no rush.
“A busy spring property season has overflowed into the start of this year and all signs point to raised levels of activity continuing for the coming months,” Mr Mazzarella said.
“This will be especially beneficial on the supply side, offering prospective buyers more choice, ultimately helping the economy.”
