Confidence is returning to the Victorian property market, with first-home buyers leading the charge.
This is a finding of ME Bank’s latest property sentiment report, which reveals one in four metropolitan Melbourne homeowners believe their property will increase in price within a year.
That marked an increase from one in five owners in the bank’s last survey — released in April, at the height of the city’s first COVID-19 wave.
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Market participants are seeing a new dawn in Melbourne. Picture: Mark Stewart
At the same time, the proportion of Melbourne homeowners who believed their property would fall in value over the year dropped from 40 to 35 per cent.
The figures are still well down on those published in the bank’s January report, before the coronavirus pandemic impacted the market, when two thirds of Melburnians predicted their property would notch annual price gains.
Barry Plant chief executive Mike McCarthy said Melbourne market participants had overcome an “initial wave of concern”, after predicted massive price drops failed to materialise.
“Everyone’s just got a bit more confidence since prices haven’t fallen off a cliff,” Mr McCarthy said.
“Because the market has stayed balanced in terms of supply and demand, we’ve seen good results throughout the whole period.”
COVID-19 lowered foot-traffic, but home values fell just 2.3 per cent. Picture: William West / AFP
Melbourne home values shed 2.3 per cent in the June quarter, according to property data firm CoreLogic.
ME general manager of home loans Andrew Bartolo said the latest survey results reflected “the robustness of property, and the fact there is this underlying affinity with property”.
But, with the survey conducted in June, he warned renewed lockdown restrictions could lead to another fall in confidence as the city struggled to shake off the virus.
The survey, which polled 1000 people nationally also found 51 per cent of budding first-home buyers intended to take the plunge in the next year, up from 42 per cent three months ago.
More investors planned to jump into the market too, with 39 per cent of respondents signalling their intention to buy within a year, up from 17 per cent.
A return to lockdown is likely to impact confidence levels. Picture: William West / AFP
“Clearly first-home buyers and some investors are looking at the current situation as an opportunity to obtain value,” Mr Bartolo said.
Amy Lunardi Property advocate Amy Lunardi said the “massive” jump in investor engagement was a sign of the market’s resilience.
“Investors are the most fickle in any market,” Ms Lunardi said.
“People have now realised the property market is so much more robust than everyone predicted (so) investors’ appetites are returning.”
Despite a return to stage three restrictions, Ms Lunardi said all the buyers she was working with were continuing with their plans.
“Nothing has really changed for them,” she said. “Now they are prepared, rather than last time, when we didn’t know what this could mean.”
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