This article is from the Australian Property Journal archive
EVEN with historic low interest rates, buyer and seller sentiments have fallen by 7% in the past three months.
According to ME’s Quarterly Property Sentiment Report for April, overall sentiments dropped from 49% to 42% in the residential property market amongst buyers and sellers.
“When property prices and interest rates lowered last year during the pandemic, a unique buying opportunity opened up for confident first home buyers with cash savings and secure employment, while many investors became nervous,” said Claudio Mazzarella, head of home loans and personal banking at ME.
First home buyers’ sentiment fell by 3% to 24% this quarter, down 5% on the same period last year, the lowest level among buyer groups.
“Now prices have rebounded strongly and affordability is going down, first home buyers aren’t feeling as positive,” added Mazzarella.
Investor sentiment was the highest among buyer groups at 52%, though still down 6% from the previous quarter.
Buyer sentiment is being dragged down by a perception of low supply, with 60% of survey respondents believing there is limited choice in the residential property market, up 17% from results in January.
This was especially prevalent in regional areas, at 65%, particularly in regional NSW at 75%. Comparatively 57% of metropolitan buyers felt there was a lack of choice.
“With more city dwellers moving to sea or tree change areas, supply is dwindling and adding pressure to prices,” he continued.
91% named housing affordability as a big issue across Australia, amongst first home buyers this number was higher, at 93%.
67% of respondents in the residential property market are anticipating prices in their area to grow in the next 12 months.
“Rising prices are making property owners feel wealthier, when many buyers are stretching their budgets to afford the limited but growing availability of stock on the market at the moment,” said Mazzarella.
82% of property buyers are also worried about paying too much for property in the current market.
For investors the opposite is true, with property owners general financial confidence rising to 42% and investors ‘sense of wealth’ has grown to 41%, both these factors are at the highest levels since ME’s survey debuted in April of 2019.
Despite doubts, first home buyers are the group who are most looking to buy property in the next year, at 52%. While investors responded at 40% and owner occupiers at 21%.
“Although overall sentiment is lower among first home buyers, our findings show they are still the eager to buy property over the next year.
Much of this is being driven by a fear of missing out on current market conditions, with 58% of respondents say they feel “FOMO” in buying property currently.
However 23% of investors responded that they want to sell property in the next 12 months, while only 11% of owner occupiers responded likewise.
Buyers in Sydney are more likely to buy in the next 12 months than Victorians, at 38% compared to 32%.
Likewise sellers in Sydney are more likely to sell in the last 12 months at 13%, compared to 10% of Victorians.
The low interest rates are still pulling in buyers, with around 75% of those looking to buy or invest in property have marked the interest rates as making the prospect of more attractive.
