Buyer confidence and house price hopes surge in 2021

author-avatar By on February 03, 2021
Buyer confidence and house price hopes surge in 2021

Confidence among Australians in the property market has reached a record high as house prices are tipped to surge in 2021.

ME Bank's latest Quarterly Property Sentiment Report shows positive sentiment among those in the property market is at record highs, while negative sentiment is at an all-time low, since the bank began its sentiment reports in 2019.

The report, which surveyed more than 1,000 Australian investors, owner-occupiers and first home buyers, found that confidence is being buoyed by expectations for rising property prices, increased levels of market activity, and a combination of record low interest rates and government incentives like HomeBuilder.

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Lender
Advertised rate Comparison rate Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • Refinance only. Fast online application
  • No Nano fees. Free 100% offset sub account
  • Mobile app, Visa debit card & instant payments
VariableMore details
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
YOU COULD WIN $100k TO PAY DOWN YOUR LOAN*

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • For a chance to win $100K towards your home loan, apply with Athena before Oct 31 & be approved by Dec 15
  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
VariableMore details
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^
AN EASY ONLINE APPLICATION

Yard Home Loan (Principal and Interest) (Special) (LVR < 70%)

  • Unlimited additional repayments
  • Unlimited free redraws
  • Optional 100% offset can be added for $120 p.a.^

Rates correct as of October 27, 2021. View disclaimer.

ME Bank's Head of Home Loans and Personal Banking Claudio Mazzarella said the record high levels of positive sentiment among Australians is reflective of the resilience of the housing market, after some economists had predicted house price falls of up to 30% in 2020.

"While there are still many challenges such as unemployment and job insecurity, it's promising to see how sentiment and market activity have rebounded," he said.

"Government incentives such as HomeBuilder and record low interest rates have no doubt been large contributors to driving momentum across the market.

"We fully expect to see property investors back in full force this year. Sentiment within this group is bouncing back, with low interest rates make investing in property a more attractive option."

Positive sentiment among investors and owner-occupiers increased by 15 and 17 percentage points respectively. 

However, sentiment among first home buyers dropped 4 percentage points, despite 74% of FHBs saying that stimulus measures such as first home buyer incentives, stamp duty relief and HomeBuilder have made buying or investing more attractive to them.

High hopes for house prices

When COVID first began to impact Australians last year, fears of a housing crash began to build. Almost 12 months on, momentum in the property market is picking up speed fast, as speculation rises of a 2021 housing boom.

The report found 77% of those in the property market expect house prices to bounce back this year.

Similarly, fewer property owners are worried about COVID impacting the value of their property.

It comes after the last Domain house price report shows house prices hit a record high at the end of 2020 in all but two capital cities.

The national median house price surged by 5.8% in the three months to 31 December 2020, to $852,940.

When asked about property price expectations over the next 12 months, 54% of homeowners and buyers predicted prices will continue to go up.

Only 7% thought prices will fall.

"It's clear from our latest report that most Australians anticipate a strong uptick in residential property prices," Mr Mazzarella said.

"The data also shows a general increase in people's sense of wealth and financial confidence as a result of these price movements.

"The flip side to higher property prices is that it will make it harder for first home buyers to get their foot in the door. It will be important for new entrants in the property market to do their research."

Home loan lending data released yesterday reveals a 9.3% increase in first home buyer loans in December, the highest level since June 2009.

But despite the record increase in lending to first home buyers, an overwhelming 95% said housing affordability remains a big issue in Australia.


Photo by R ARCHITECTURE on Unsplash

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered which includes retail products from at least the big four banks, the top 10 customer-owned institutions and Australia’s larger non-banks:

  • The big four banks are: ANZ, CBA, NAB and Westpac
  • The top 10 customer-owned Institutions are the ten largest mutual banks, credit unions and building societies in Australia, ranked by assets under management in November 2020. They are (in descending order): Great Southern Bank, Newcastle Permanent, Heritage Bank, Peoples’ Choice Credit Union, Teachers Mutual Bank, Greater Bank, IMB Bank, Beyond Bank, Bank Australia and P&N Bank.
  • The larger non-bank lenders are those who (in 2020) has more than $9 billion in Australian funded loans and advances. These groups are: Resimac, Pepper, Liberty and Firstmac.
  • If you click on a product link and you are referred to a Product or Service Provider’s web page, it is highly likely that a commercial relationship exists between that Product or Service Provider and Savings.com.au

Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site.

In the interests of full disclosure, Savings.com.au, Performance Drive and Loans.com.au are part of the Firstmac Group. To read about how Savings.com.au manages potential conflicts of interest, along with how we get paid, please click through onto the web site links.

*Comparison rate is based on a loan of $150,000 over a term of 25 years. Please note the comparison rate only applies to the examples given. Different loan amounts and terms will result in different comparison rates. Costs such as redraw fees and costs savings, such as fee waivers, are not included in the comparison rate but may influence the cost of the loan.

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author-avatar
Emma Duffy is Assistant Editor at Your Mortgage and  Your Investment Property Mag, which are part of the Savings Media Group. In this role, she manages a team of journalists and expert contributors committed to keeping readers informed about the latest home loan and finance news and trends, as well as providing in-depth property guides. She is also a finance journalist at Savings.com.au which she joined shortly after its launch in early 2019. Emma has a Bachelor in Journalism and has been published in several other publications and been featured on radio.

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