Buyer sentiment downcast amid rosy property outlook

Affordability and supply issues appear to be dampening the mood of Australian homebuyers, according to findings from ME Bank’s latest Quarterly Property Sentiment Report.

Conducted in April 2021, the report perceives the overall sentiment of buyers and sellers in the residential property market dipping seven percentage points to 42 per cent in the past three months. This follows record-high sentiment during the first quarter of 2021, which was conducted during the economic highs of the post-pandemic lockdown phase.

Other key report findings

Among buyer groups, first-home buyers recorded the lowest level of positive sentiment this quarter, down three percentage points to 24 per cent, while investors recorded the highest at 52 per cent.

Contributing to a decrease in positive sentiment this quarter is a fall in the perceived availability of residential property. Overall, 60 per cent of survey respondents believe there “isn’t enough choice in the current residential property market” − a 17 percentage point increase since January.

Overall, 91 per cent of survey respondents said “housing affordability is a big issue in Australia” — rising to 93 per cent among first-home buyers.

Around 67 per cent of those in the residential property market are “expecting prices to increase in their area during the next 12 months” — a 13 percentage-point rise since January.

An overwhelming 82 per cent of the property buyers surveyed said they “feel worried about paying too much for property in the current market”.

Hopeful glimmer

However, property owners’ “sense of wealth” and “general financial confidence” increased to the highest levels since ME’s survey began in April 2019.

Investors appear to be looking to cash in on high prices, with 23 per cent indicating they want to sell their property in the next 12 months, compared with only 11 per cent of owner occupiers.

By location, Sydneysiders are more likely to buy (38 per cent) and sell (13 per cent) in the next 12 months than Victorians (32 per cent and 10 per cent, respectively) and those in other states.

ME’s findings revealed more than half (58 per cent) of those looking to buy “feel a sense of FOMO (fear of missing out)” when buying property in the current market.

Trans-Tasman perceptions

On a similar footing, while housing confidence in New Zealand is at a 25-year high, buyer sentiment has soured as properties become increasingly unaffordable, Auckland Savings Bank research found.  

With average house prices estimated at eight times the average household income, the latest quarterly ASB Housing Confidence Survey reveals 73 per cent of respondents expect house prices to rise. This compares with expectations of 45 per cent of respondents in the previous survey in July last year.  

Buyer sentiment contrasts starkly with houses being sold in numbers not seen in 15 years.

With prices not expected to fall, restoring market balance is high on the regulation agenda. The Reserve Bank of New Zealand has reintroduced loan-to-value ratios and requested another tool from the government in debt-to-income ratios.   

chrisbrown1224

Managing Director – New Vision Financial Services & New Vision Real Estate After years in the banking, finance & commercial sector Chris noticed that the industry needed a company with a personal touch that offered their customers a complete solution. In 2015 New Vision Financial Services was created to allow our consultants to use their experience (including approving and structuring large complex commercial transactions through to basic home loans) and to concentrate on offering a personalised service to their clients. With the growth and success of New Vision Financial Services a decision was made in 2019 to launch New Vision Real Estate to provide an end to end solution for client weather they be first home buyers or seasoned investors. Chris has built a team at New Vision Financial Services and New Vision Real Estate that have access to over 70 different lenders, insurers, lawyers, accountants and financial planners giving you more flexibility when making a decision. We offer a full service Real Estate agency offering Sales, Leasing, New Developments, House & Land and Commercial. Call me anytime on 0433 181 544 or email chris@newvisionfinancial.com.au The team at New Vision Financial Services have access to over 70 different lenders, giving you more flexibility when making a decision. Our consultants have had extensive experience within the banking, financial and corporate sector. At New Vision Financial Services we specialise in finance lending for home, investment, business, commercial, asset, debtor and many other requirements. As New Vision Financial Services has progressed, we have developed strong relationships with professional service providers such as; Financial Planners, Accountants, Settlement Agents, Leasing & Equipment Providers, Debt Management Specialists and any more to allow our clients access to a complete suite of services.