Property positivity on the rise, but COVID concerns remain
Australians are becoming more optimistic about property markets following the first wave of COVID-19, but the majority of respondents to a new survey say they’re not willing to transact over the next 12 months.
ME Bank’s sixth quarterly Property Sentiment Report showed positive sentiment rose to 35 per cent for Q3 2020, up six points from the previous quarter but under the recent high of 39 per cent in the first quarter of the year.
Concern about falling property values due to COVID-19 also eased, by 9 percentage points, but remained elevated, with 55 per cent of respondents remaining worried.
Just 26 per cent of respondents said they expected home values to rise over the next year, with 31 per cent expecting prices to fall, and 31 per cent forecasting steady markets.
Queensland respondents were the most optimistic, with 29 per cent expecting house prices to increase over the next 12 months.
The survey showed 61 per cent of respondents were planning to sit tight and neither buy nor sell property in the next 12 months, with just 10 per cent saying they would put their properties on the market.
ME Bank general manager of home loans, Andrew Bartolo, said the pandemic was continuing to shift sentiment and create property volatility.
“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.”
The survey also found young buyers were eager to take advantage of government stimulus packages, with more than half interested in applying for the HomeBuilder grants.
A vast majority - 82 per cent - of first homebuyers are hoping to see property bargains as a result of the contracting economy, the survey found, compared to 66 per cent of investors and 57 per cent of owner occupiers.
“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,” Mr Bartolo said.
“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 are also increasingly interested in regional areas, with 60 per cent of first homebuyer respondents saying they would consider a tree change to save money and improve their lifestyle.
Less than half of overall respondents (45 per cent) said they would consider a regional change.
“New remote and flexible working arrangements brought in to accommodate for COVID-19 have clearly influenced Australians’ sentiment towards buying in regional areas,” Mr Bartolo said.
“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.”