A month is a long time in real estate. In the weeks leading up to the May Federal Election, the prognosis for Australian property was mostly doom and gloom.
Fast forward to the middle of June, and a report from ME Bank found buyers expectations for prices over the next 12 months remain net positive, with 32% expecting prices to rise.
ME’s GM Home Loans Andrew Bartolo said, “Sentiment has likely improved since we conducted the survey given negative gearing now seems to be off the table and APRA has proposed changes to home loan serviceability.”
Andrew added that cooling property prices have also presented new opportunities for those trying to get into the market. “If you’re planning to buy, it’s important to think long-term and always buy affordable.
“Consider whether you can comfortably repay your mortgage over the long term regardless of changes to interest rates, your lifestyle, and without having to rely on less dependable sources of income like rent and bonuses.”
Angus Raine, Executive Chairman, Raine & Horne, said the ME findings were a clear indication that consumers prefer certainty. “The double threat of changes to negative gearing and capital gains tax spooked the market and seemingly our regulators.
“Since the election campaign we’ve seen the banking watchdog, The Australian Prudential Regulation Authority (APRA) call for less-restrictive lending criteria for mortgages, while the Reserve Bank made a much-needed cut to official interest rates for the first time in almost three years.”
Buying real estate is about timing
Angus added that consumer confidence is returning to markets right across the continent. He said, “We’re seeing double the number of groups at open homes in Marrickville in Sydney’s inner west, while one of our agents in Adelaide sold a property in Strathalbyn to an elderly downsizer that was on the market for less than 60 minutes.
The rapid change in confidence and the impact on market activity is also evidence that real estate market timing is becoming an important element for buyers and investors. Angus explains, “For property investors and buyers, timing a real estate transaction is becoming an increasingly important factor given market cycles can change more dramatically than in the past even in bigger markets such as Sydney and Melbourne.
“After 18 months of negative sentiment, many Australian markets are at a tipping point and now is the time to buy before values start trending north again.
“Likewise, with the ME report indicating that demand will outstrip supply this year, conditions for vendors will improve quickly too and it might be time to seek out your local Raine & Horne agent for an appraisal if you have plans to sell soon.”