Homeowners are less worried about the state of the property market while prospective buyers are feeling more confident about buying or selling, according to ME Bank's latest Quarterly Property Sentiment Report.

Based on a survey of 1,000 Australians, the report found that 38% of Australians were feeling 'positive' about the state of the nation's property market in the fourth quarter of 2020, compared with 29% earlier this year at the height of COVID.

“This is really promising and indicates that despite volatility in the market, Australians have a resilient mindset when it comes to property,” ME's Head of Home Loans Andrew Bartolo said.

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Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
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Principal & Interest
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6.14% p.a.
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Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

The report found that many homeowner-related worries have eased since earlier this year, with 49% worried about the value of their property falling (compared with 64% in April) and only 29% worried about paying back their home loan once deferrals end (compared with 31 in June).

Pandemic price crash unlikely

The report found that Australians are also more optimistic about house prices, with 65% predicting them to either increase or stay the same where they live, while only 20% are expecting them to fall over the next 12 months.

This is compared to 46% and 41% respectively in April this year.

The survey also revealed Australians are feeling more confident about buying or selling property now that COVID restrictions are easing.

Sentiment among those intending to buy or sell within the next 12 months indicates a 'two-speed market'.

Over half (57%) said they're ‘not in a rush and are delaying their move until the COVID-19 situation improves’, while 43% are looking to buy or sell 'as soon as possible'.


Source: ME Bank

Melburnians are the most likely to buy in the next 12 months (44%) compared with other states.

Sydneysiders are also feeling particularly confident about the property market, with confidence up from 29% in June to 42% in October. 

First home buyers are the most likely group to buy a home (53%), however 58% say there 'isn't enough choice in the market' and 58% say it's 'harder to save for a home loan deposit during COVID'.

Despite the gradual withdrawal of government support and continued job losses, Mr Bartolo said recent cash rate cuts from the Reserve Bank should encourage buyers to make a move.

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Source: ME Bank

“Despite growing positivity and optimism for house prices, there’s still many buyers and sellers who will be more comfortable continuing a ‘watch and see’ approach," he said. 

"The cash rate cut at the start of the month may encourage some to make moves in the market – particularly first home buyers looking to take advantage of the record low interest rates, price falls and reduced investor activity."

However, housing affordability remains a concern with 88% of Australians agreeing it's a 'big issue'.

Investors back in the market

Over 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.

More than half (54%) of investors surveyed said ‘more supply in the rental market together with falling rents hadn’t delayed their investment plans’.

However, when those in the property market were asked if they think landlords will need to reduce rents to attract tenants, 65% said yes. 

This increased to 78% among Sydneysiders and 73% among Melbournians.

See also: COVID pushes renter-landlord relations to the brink

“Despite the challenges of the current rental market, investor sentiment appears resilient and on the road to recovery," Mr Bartolo said.

"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."

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