03-Feb-2021 • Home Buying

Positive sentiment among those in the property market has reached a record high, and negative sentiment an all-time low, since ME first started its Quarterly Property Sentiment Report in 2019.

ME’s latest Report, conducted in January 2021, showed buoyed sentiment is being supported by expectations for residential property price increases, higher levels of market activity and a combination of record low interest rates and government incentives.

The rise in positive sentiment was reported across all states and territories. Queensland reported the highest level of positivity in Australia (56% in metro areas, 58% in the regions).

Among different buyer cohorts, investors and owner occupiers reported to be considerably more positive than last quarter (October 2020). Positive sentiment increased by 15 and 17 percentage points, respectively. First home buyers, however, recorded a fall in positive sentiment, down 4 percentage points to 27%.

Around 72% of those ‘looking to buy’ said ‘stimulus measures such as HomeBuilder, first-home buyer incentives and stamp duty relief in some states have made buying or investing in property more attractive to them’ – rising to 74% among first home buyers.

Furthermore, 79% of those ‘looking to buy’ said ‘record low interest rates have made buying or investing in property more attractive to them’.

ME’s Head of Home Loans and Personal Banking, Claudio Mazzarella, said the record high positive sentiment is a reflection of Australia’s resilient property market and strong incentives currently on the table for buyers.

“While there are still many challenges such as unemployment and job insecurity , it’s promising to see how sentiment and market activity have rebounded,” he said.

“Government incentives such as HomeBuilder and record low interest rates have no doubt been large contributors to driving momentum across the market.

“We fully expect to see property investors back in full force this year. Sentiment within this group is bouncing back, with low interest rates make investing in property a more attractive option.”

Great expectations for rising property prices

In ME’s Report, 77% indicated they ’expect to see property prices bounce back’ this year. Similarly, less property owners are worried about ‘COVID-19 impacting the value of their property’ (down 7 percentage points to 43%).

When asked about property price expectations for the next 12 months, 54% of property owners and buyers predicted ‘prices will go up’. Only 7% said they think they’ll ‘go down’. Owner occupiers reported the highest expectations for prices going up (57%).

“It’s clear from our latest Report that most Australians anticipate a strong uptick in residential property prices. The data also shows a general increase in people’s sense of wealth and financial confidence as a result of these price movements.

“The flip side to higher property prices is that it will make it harder for first home buyers to get their foot in the door. It will be important for new entrants in the property market to do their research,” said Mr Mazzarella.

An overwhelming 95% of first home buyers said ‘housing affordability is a big issue in Australia’.

Making up for lost time: An active buying and selling season on the horizon

Following a year of restrictions and challenges for auctions and inspections, 78% of report respondents said they ‘expect there will be more residential real estate activity this season to make up for last year’.

Additionally, of those intending to buy or sell property in next 12 months, more indicated they're eager to do this ‘as soon as possible' (up 4 percentage points to 47%) and less said they're ‘not in a rush’ (down 4 percentage points to 53%).

“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. This will be especially beneficial on the supply side, offering prospective buyers more choice, ultimately helping the economy.” added Mr Mazzarella.


Editor notes: ME’s Quarterly Property Sentiment Report is based on national survey of 1,000 Australian adults in the property market (i.e. investors, owner occupiers and first home buyers). The survey is designed, developed and produced quarterly by industry super fund-owned bank ME with fieldwork conducted by Pure Profile. This edition presents the findings from the eighth edition conducted in January 2021.


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