A survey by ME Bank has revealed that 46 per cent of owner-occupiers expect the value of their dwelling to increase during 2021, while only 5 per cent expect it to decline.
The survey of 1,500 households showed that this is a significant shift from six months prior, when only 22 per cent expected dwelling prices to rise, and 25 per cent expected them to decline.
Outlining his predictions for the property market in 2021, ME Bank’s head of home loans Andrew Bartolo said that buyer activity is expected to rise year-on-year as a result of the majority of 2020 affected by lockdowns, and buyers and sellers “waiting to see” before pulling the trigger on any decisions about their property.
“Pent up demand will wash through early 2021,” Mr Bartolo said.
“More investors will re-emerge in 2021 in search of income and capital growth. Record low interest rates will drive momentum across the market.”
Furthermore, Mr Bartolo has predicted that strong first home buyer (FHB) activity would continue after a brief slide in property prices.
“Historically low interest rates, stamp duty exemptions, government grants and the absence of foreign investors will continue to propel first home buyers into action,” he said.
While property stock has been weak recently, Mr Bartolo believes that more listings would return to the market by vendors who have waited during 2020 to place their property on the market, and added that eager buyers would immediately pounce on the stock.
“Early 2021 is expected to be a bumper property season that will rival the traditional spring frenzy experienced in previous years as buyers respond to a late surge in auction listings,” he said.
Mr Bartolo believes sentiment among buying and selling intentions would likely be “two-speed” in the next 12 months.
“Many will be looking to buy or sell as soon as possible, while others may delay their move until they feel more confident about their own personal finances and/or the economy,” he said.
Commenting on how increased work-from-home arrangements would impact property trends and the desire for “urban village living” 2021, Mr Bartolo said that with the daily commute no longer a deciding factor in purchasing a home, more homebuyers are considering buying in regional areas.
“Many are succumbing to the appeal of a slower pace of living, a closeness with nature, connection with neighbours and a feeling of belonging. Yet all the benefits and convenience of being close to the city,” he said.
A ME Bank survey in June 2020 found that 60 per cent of FHBs were more likely to consider buying in a regional area due to COVID-19 to save money and improve their lifestyle.
“The demand in regional areas has started to translate in higher prices with the November CoreLogic Home Value Index showing 6.8 per cent growth in regional verses capital city growth of 2.9 per cent in year-to-date,” Mr Bartolo said.
Mr Bartolo concluded that while challenges remain in the economy including unemployment, job insecurity, and lower immigration, the property market has showed positive signs, while a more competitive home loan market would benefit customers seeking a better deal.
“Improved consumer confidence, stronger auction clearance rates, more transactions, and falling loan deferrals – generally considered proof of a healthier market,” he said.