Evidence is quickly ‘stacking up’ in favour of an emerging property boom, with continuing signs that our property markets may have hit the bottom and are now going from strength to strength.
The surge in Investor confidence was captured in NAB’s most recent consumer sentiment survey; Time to buy a dwelling indicator, which rose to the highest level seen in 7 years. This confidence was further recognised via a significant improvement to NAB’s House price expectations index, where the results bounced back to resemble pre-covid vibrant market momentum.
A growing list of indicators now point to the fact that we have passed the bottom, and are entering a rebound period.
Perhaps one of the most significant milestones that could be remembered by many as the key turning point within this unprecedented pandemic period will be the RBA announcement on Melbourne Cup Day 2020.
Did the RBA provide tipping point?
The latest announcements by the Reserve Bank of Australia may have provided the final ingredients required to trigger the start of a new post Covid-19 property market chapter.
Not only did the Reserve Bank cut the official cash rate to a new historic low, they also announced that Australia’s first Recession in 30 years was already over. But the good news kept coming, with the RBA Governor also assuring investors that low interest stay and we should expect the current low levels to be ‘the norm’ for at least the next few years.
Survey after survey are now capturing a significant rise in consumer confidence. ME Bank’s latest Quarterly Property Sentiment Report, has highlighted that Homeowners are less worried about the state of the property market while prospective buyers are feeling more confident about buying or selling.
The results form most surveys confirm that optimism in the property market has almost rebounded to pre-COVID levels after numerous cuts to interest rates and a bounce back in house prices.
Investors are back in the market
The recent Quarterly Property Sentiment Report conducted by ME Bank also identified that more than two-thirds (69%) of property owners and buyers indicated that ‘record low interest rates have made buying or investing in property more attractive to them’.
The report found investors are feeling more positive about the property market, up from 34% in April to 43% in October.
Perhaps the biggest area of concern was with regards to feed back around the potential need for Property Investors to reduce rents in the near future, with 78% believing this would be required in the Sydney rental market and 73% in Melbourne.
“Despite the challenges of the current rental market, investor sentiment appears resilient and on the road to recovery,” Mr Bartolo from ME Bank commented.
“There are many factors at play, but with the residential property being a prudent investment vehicle and low interest rates, investors seem prepared to weather any property market fluctuations that may occur as the COVID-19 situation evolves.”