Property sentiment up as Aussies expect price lifts: ME Bank

With Victoria’s second wave of infections behind us and the economy slowly returning to normal, findings from ME Bank show property market sentiment has almost bounced back to pre-COVID-19 levels.

According to its latest Quarterly Property Sentiment Report, 38% of Australians feel positive about the direction the market is heading, up from 29% in April and almost on par with October 2019 (42%).

So far, the market has proven to be remarkably resilient. Recent data from CoreLogic showed home values returning to positive month-on-month growth last month, with every capital city besides Melbourne posting an increase in values.

This has buoyed sentiment among homeowners, with 65% predicting house prices will increase or stay the same where they live, and a shrinking number (20%) expecting prices to decline over the next 12 months.

Attitudes towards housing affordability have also improved slightly, though Australia’s sky-high prices remain a concern for a majority (88%) of Australians. 

Two-speed market forms as some adopt ‘wait-and-see’ approach

Though sentiment is showing improvement across the board, Australians with sights on the property market are divided on how soon they intend to act. 

Among those surveyed by ME, 43% indicated they are looking to buy or sell a property as soon as possible. Meanwhile, 57% said they intend to delay any moves until the COVID-19 situation improves.

“Despite growing positivity and optimism for house prices, there’s still many buyers and sellers who will be more comfortable continuing a ‘watch and see’ approach,” said ME’s head of home loans, Andrew Bartolo.

“The cash rate cut at the start of the month may encourage some to make moves in the market – particularly first home buyers looking to take advantage of the record low interest rates, price falls and reduced investor activity.”

ME Bank found that those living in Victoria’s metro areas are most eager to get on the market, with 44% indicating they intend to buy in the next 12 months. 

Confidence is also high among first home buyers. However, 58% of respondents expressed concerns about a lack of choice in the market, and an equal number admitted that COVID-19 has made it harder to save up a deposit.

For more insights into mortgage and lending trends, browse our home loan statistics page. And if you’re looking to enter the market yourself, head over to our home loan comparison page.