House values are continuing to climb throughout the country but fewer than half of Australians believe now is a good time to buy property.
Financial comparison site Finder’s Consumer Sentiment Tracker has been analysing data from more than 24,000 Australians for 24 consecutive months.
At the end of last month, home-buying sentiment reached its lowest ebb since lockdowns began last year.
Finder’s Property Positivity Index (pictured below) is currently at 49 per cent, which is only a few points higher than the April 2020 low of 42 per cent.
This contrasts with December 2020, when a record-high number of people (67 per cent) said it was a good time to buy.
Finder’s head of consumer research Graham Cooke said property optimism among Australians had “yo-yoed” over the past year.
“As lockdowns rolled out across Australia and open house inspections declined, Finder’s Property Positivity Index nosedived only to recover again as the housing market sprang back to life,” Mr Cooke said.
“Both the rock-bottom cash rate and FOMO have turbo-charged prices but fears of a property bubble are making many Aussies pessimistic that now is the time to buy,” he said.
Although fewer people among those surveyed thought now was a good time to buy, almost three quarters (74 per cent) believed property prices in their area would continue to rise over the next 12 months. That figure is up from a low of 24 per cent of respondents in April 2020.
Asking the experts
Finder asked a sample of the leading experts and economists it has engaged for Finder’s RBA Cash Rate Survey to weigh in on the survey results.
When asked about whether prospective first-time buyers with a deposit saved may miss an affordability window if they do not purchase within the next year, Finder’s RBA panelists were divided.
Nine out of 16 experts (64 per cent) said they believed would-be buyers would miss out, with seven (36 per cent) saying they would not.
Wealth Within stock-market analyst Dale Gillham did not believe buyers would miss out by holding off.
“This situation has been talked about since Adam was a boy and it will continue to be into the future,” he said.
“I have never seen a time when we thought property was cheap for anyone let alone first-time buyers,” he said.
Conversely, Rebecca Cassells of Bankwest Curtin Economics Centre said buyers may miss a window if they don’t buy.
“Increased house prices driven by significant stimulus and a low interest rate environment has the potential to lock out future first-home buyers by making it even harder to come up with the deposit needed to enter the market,” Ms Cassells said.
Regardless of whether or not a window of opportunity exists, Mr Cooke said there has been a significant turnaround in property price expectations over the past year.
“The last six months resulted in the largest amount borrowed to buy housing in any six-month period in Australian history,” he said. “The property market really is surging back into life.”
Many happy returns
Finder’s Australian Happiness Index – a representation of the average percentage of Australians who said they were happy at the time of survey completion – sharply declined last year as lockdowns came into effect.
The index dropped from 78-79 per cent in the 13 months to February 2020, to a low of 69 per cent in April last year.
The index then made a recovery in June and July, before falling again in August as a state of disaster was declared in metropolitan Melbourne.
The index has now fully recovered, averaging 80 per cent for every month of 2021.
“Since the index recovered in January 2021, Aussies have reported being more consistently happy than in the 12 months before the pandemic,” Mr Cooke said.
“When you look at how well we have done with the virus versus other countries this might not be surprising,” he said.
