Property sentiment skyrockets but affordability concerns prevail

author-avatar By
on September 16, 2021
Property sentiment skyrockets but affordability concerns prevail

Seller confidence is on the rise in Sydney, while locked-down Melbourne and Canberra saw listings fall, but new insights suggest affordability concerns remain.

A new report from realestate.com.au revealed that Sydney's housing market is showing signs of recovery as listings rose 11.9% from July to August.

According to the PropTrack Listings Report September 2021, new listings for sale on REA fell by 2.3% in August, which was attributed to Melbourne, Canberra, and Darwin 'pressing pause' on new campaigns.

This is the lowest level of new listings nationally since January, but these numbers are still 17.1% higher year-on-year.

Listings in Melbourne fell 27.1% in August, and Canberra's listings also dropped by 35.1%. Both of these cities are still currently in lockdown.

Darwin also saw a drop in listings by 1.5%, with the report pointing to the snap lockdown as the cause.

Additionally, new listings in Brisbane dropped off by 4.9% in August.

On the other hand, new listings rose in Adelaide, Hobart, Perth, and Sydney for the month of August.

Specifically, listings rose by 37.3% in Adelaide; 22.4% in Hobart; 7.2% in Perth; and 11.9% in Sydney.

Cameron Kusher, REA Group Director Economic Research, said the announcement of a pathway out of lockdown in Sydney, coupled with the ability to conduct one-on-one inspections, instilled new confidence in Sydney sellers. 

"While lockdowns have impacted the preparedness of vendors to list, buyer demand has not been dampened," Mr Kusher said.

"With ongoing high levels of buyer demand and sellers delaying listing through lockdown, we anticipate new listings will rise quickly as restrictions ease."

Mr Kusher said he anticipates strong selling conditions for Spring across other markets in Australia, as shown in Adelaide where new listings jumped following a snap lockdown.

"It appears unlikely demand and supply will return to equilibrium in the short-term, which is likely to lead to further increases in property prices," he said.

Housing turnover 'highest level in 12 years'

CoreLogic estimates there were almost 600,000 residential properties sold in the past 12 months - the highest number of annual sales since 2004.

This represents a 42% lift on annual sales numbers for the previous 12 months.

Additionally, the number of dwellings sold nationally was 31% higher than the decade average, and 24% higher than the 20-year average.

Every state and territory except for Tasmania reported at least a 10% lift in year-on-year sales.

CoreLogic's report says the smaller increase in Tasmania is probably because of a lack of supply rather than a shortage of demand.

Specifically, annual sales in Western Australia are up by 62%; home sales rose by 59% in Northern Territory; and Queensland saw a lift of 54% in year-on-year sales.

This was also evident in the latest GDP figures, which showed housing ownership transfer costs (stamp duty and other taxes) surged 10% over the quarter.

Consumer sentiment is 'truly remarkable'

There was a 'rebound' in housing market confidence, as the 'time to buy' index rose by 8.8% according to the latest Westpac-Melbourne Institute consumer sentiment index.

This is still 26.8% below its November peak, however.

Consumers remain 'bullish' on the outlook for house prices, with the message of deteriorating affordability still weighing on the housing market.

'Affordability-constrained' states are showing the most pessimism in terms of buyer sentiment, with NSW at 94 and Victoria at 87.3.

Queensland is in 'optimistic territory' at 103, and Western Australia is sitting at 118.8.

The House Price Expectations index lifted by 1.4%, barely dented by lockdown disruptions at an eight-year high of 158.

This resilience is particularly evident in NSW, as the index surged 5.7% to 161.

Overall sentiment increased by 2% in September to 106.2, up from 104.1 in August.

Westpac economists called the resilience of consumer sentiment during ongoing lockdowns and economic contraction 'truly remarkable'.

Consumer confidence lifted by 5.3% in NSW to 106.4, and confidence remained 'steady' in Victoria at 104.1.

Sentiment made a strong gain in Queensland, up by 8.4% to 111.6.

According to Westpac economists, reads above 100 mean optimists 'comfortably' outweigh pessimists. 

Economists put the increased confidence down to improving vaccination rates and the end of lockdowns on the horizon.


Advertisement

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

Variable
More details
UNLIMITED REDRAWSSPECIAL OFFER
  • 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%
UNLIMITED REDRAWSSPECIAL 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%
Variable
More details
AN EASY DIGITAL APPLICATION
  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
AN EASY DIGITAL APPLICATION

Neat Variable Home Loan (Principal and Interest) (LVR < 60%)

  • No ongoing fees - None!
  • Unlimited additional repayments
  • Easy online application, find out if you're approved quick!
  • Redraw- Access your additional payments if you need them
  • Use the app to get loan insights to help you pay off your home loan faster
Variable
More details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES
  • 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
Variable
More details
NSW/VIC/SA METRO & INNER REGIONAL AREAS$5000 CASHBACK. T&Cs APPLY.
  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
NSW/VIC/SA METRO & INNER REGIONAL AREAS$5000 CASHBACK. T&Cs APPLY.

Variable Home Loan (Principal and Interest)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services

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. All products will list the LVR with the product and rate which are clearly published on the Product Provider’s web site. 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 May 29, 2022. View disclaimer.


Image by Josh Withers 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. 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. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

Latest Articles

author-avatar
Rachel is a Finance Journalist, and joined Savings in 2021. Coming from a background in the FinTech space, her interests include the innovation of lending technology, property, investing, and more. With a passion for educating and informing people about their finances, she hopes to increase the financial literacy of everyday Australians.

Be Savings smart.
Subscribe for free money newsletters.

By subscribing you agree
to the Savings Privacy Policy