While property prices continue to show signs of growth, Aussie consumers are reporting stronger levels of confidence, according to new research.
ME’s Third Quarterly Property Sentiment Report has found that 42 per cent of Australians in the property market feel positive about it (up 9 percentage points) and 24 per cent feel negative (down 2 percentage points).
ME’s general manager of home loans, Andrew Bartolo, said consistent house price increases over the past three months have created much needed certainty that early price increases weren’t simply a blip in the data.
The recent uptick in first home buyer activity is also promising, he said.
“However, sentiment among first home buyers didn’t surge as much as others, which suggests the recent house price movements may have marked the end of a unique opportunity to buy ‘at the bottom’,” Mr Bartolo explained.
Which way is the marketing heading?
In the three largest capital cities, prices are expected to continue to rise, with 57 per cent of respondents forecasting positive price movements. This positive sentiment is approximately 10 per cent higher than the overall sentiment for the country.
Respondents across all major cities have a positive outlook on prices, with the exception of Western Australia, wherein prices are predicted to fall.
“With a relatively solid spring selling season and a number of months’ worth of house value growth under the belt – according to CoreLogic data – there’s more confidence that the upward trajectory of prices will continue, albeit modest increases,” Mr Bartolo said.
People heading back in the market
The report found that more Australians are willing to get back into the property market after a period of sitting on the fence: more are intending to buy (up 2 percentage points), more are intending to sell (up 4 percentage points) and less are intending to do neither (down 4 percentage points).
“Over the past six months, we’ve noticed people taking a ‘wait and see’ approach to the market.
“While the increase in plans to transact in the market is modest, greater positive sentiment in the market suggests the recent interest rate changes, house prices, auction clearance rates, etc., are making an impact,” Mr Bartolo explained.
New conditions impact perceived worries
The past quarter has resulted in mixed feelings, with perceived worries both easing and worsening in different facets of the mortgage market.
While home owners with mortgages are concerned about being forced to interest-only repayments, they are less concerned about falling house prices, the research found.
“Reduced concern about property values falling is likely connected to the increased sense of optimism about house prices,” said Mr Bartolo.
Housing affordability remains the top worry, with 89 per cent agreeing that “despite price falls in some areas, they still think housing affordability is a big issue in Australia”, down slightly from 93 per cent in July.
“Affordability is a much more complex issue than the price of houses, and this enduring concern highlights that much more needs to be done to address the issue,” concluded Mr Bartolo.