16-Jul-2020 • Home Buying

Young first home buyers are looking far and wide for COVID-19 bargains and are eager to take advantage of new HomeBuilder grants, ME’s latest Quarterly Property Sentiment Report suggests.

A whopping 82% of first-time buyers agreed they hoped to see bargain properties for sale if the economy worsens – compared to 66% of investors and 57% of owner occupiers. Just over half (51%) of first home buyers, the most of any group, planned to get onto the property ladder in the next 12 months, up 9 points on the previous quarter. Millennials were also the most positive about the current property market by age group (40%).

These are key findings from the sixth edition of ME’s Quarterly Property Sentiment Report, which surveys investors, owner occupiers and first home buyers ahead of each upcoming quarter. This survey was conducted for Q3 2020 in June when COVID-19 restrictions initially eased across most states and territories.

ME General Manager Home Loans, Andrew Bartolo said: “First home buyers may be looking to find a silver lining in the current economic climate, thanks to greater potential for property price falls, record low interest rates and government support. Of course, this will be more realistic for those whose employment and income haven’t been affected as a result of the pandemic.”

First-time buyers considering the regions

First home buyers may be eyeing off bargains in regional areas because of the pandemic. Two-thirds (60%) said they were more likely to consider buying in a regional area during COVID-19, to save money and improve their lifestyle, compared to 45% of total respondents overall.

Mr Bartolo said: “New remote and flexible working arrangements brought in to accommodate for COVID-19 have clearly influenced Australians’ sentiment towards buying in regional areas. It’s now a more feasible option for many and if prices are lower in those areas and you think it will improve your lifestyle – of course it’s an attractive possibility.

“I think many Australians dream about moving to a regional area at some stage during their life, so it will be interesting to see how many do actually decide to pursue a sea or tree change, perhaps earlier than expected.”

First-time buyers keen on HomeBuilder

The Federal Government’s HomeBuilder appears to be spurring first home buyer interest. Over half (52%) of first home buyers said they were interested in applying for the grants, compared to just 33% of existing home buyers.

Overall, 58% of respondents said they thought HomeBuilder would significantly increase activity in the property market.

“With strong interest from first home buyers as seen in the report, hopefully the HomeBuilder grant will help more younger Australians get their foot in the door and increase buying activity in the wider market as a result,” Mr Bartolo said.

Uptick in general optimism

Overall, Australians recovered some optimism about the property market following the initial wave of COVID-19. Positive sentiment rose to 35% for Q3 2020, up six points from 29% in the previous quarter, but still well below the recent high of 39% in Q1 2020. Worries around how COVID-19 would affect the value of property also slightly eased, down 9 percentage points since last quarter to 55%.

However, when asked about their actual property plans over the next 12 months, the majority of Australians (61%) overall are still planning to hold steady and neither buy nor sell, with only 10% in the market indicating they have plans to sell, which was also reflected in the previous quarter.

“The global pandemic continues to shift consumer sentiment and create volatility in the Australian property market, a situation no one would have expected at the beginning of the year. The impact of COVID-19 negatively shifted consumer sentiment towards the property market in the second quarter of the year, but we started to see signs of optimism in June,” Mr Bartolo said.

“Hopefully this renewed positivity and growing confidence is able to weather possible second waves of COVID-19 cases as we’ve seen in Victoria, which is no doubt increasing worry across the nation.”



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 sixth edition – Q3 of the 2020 calendar year, conducted in June 2020.


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