Demand for property is picking up. Picture: John Feder/The Australian.
The property market is recovering faster than expected following a number of stimulus measures implemented during the coronavirus pandemic.
New research released on Thursday has revealed government incentives along with record-low interest rates of 0.25 per cent has seen consumer demand for property in NSW return to pre-COVID-19 levels, with confidence up by 23.9% in June alone.
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PRD’s Australian Economic and Property Report showed renewed demand translated into Sydney property prices growing 10.8 per cent in the first six months of 2020, despite coronavirus affecting the market for half of that period. The median house price was now 1.4 per cent down from the peak in April.
Buyers are now returning to the market.
PRD chief economist Dr Diaswati Mardiasmo said despite COVID-19 throwing the Australian economy and property market into turmoil, things have stabilised quicker than expected.
“That doesn’t mean everything has returned to normal yet, but government stimulus has quickly helped prop up the property market and balance out some of the ill effects of the shutdown,” she said.
Dr Mardiasmo said the market is unlikely to have a crash that many predicted at the beginning of the pandemic.
“There is not going to be a doomsday crash that some predicted, as there will always be need for people to buy and for people to sell,” she said.
“Australians still hold onto buying a home very dearly, and we can clearly see evidence of this in the demand for property during.”
The report revealed national home loan approvals totalled $12 billion in May, which was slightly below the $12.5 billion recorded in February. Of this 42 per cent of loan approvals were from buyers looking to upsize, while first home buyers accounted for 21 per cent — the highest level since 2013.
“There has never been a better time for first home buyers to get into the market with all the support they are receiving,” Dr Mardiasmo said.
Home loan approvals are now around the same levels as recorded in February.
Dr Diaswati Mardiasmo said the market is showing signs of returning to normal.
Dr Mardiasmo said the market has remained stable unlike other G20 countries due to a strong focus on property.
“Other G20 countries have not focused on property like Australia, and the measures taken here, have helped keep the market afloat and assist with getting people into a home,” she said.
Despite interest returning to pre-coronavirus levels, positive buyer sentiment is now 97.8, which is 2.2 points below a positive market. Dr Mardiasmo said while there was still caution, quality buyers remain committed.
“While sellers might have fewer inquires as a result of coronavirus, the serious buyers are still active and are prepared to make good offers,” she said.
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