Consumer sentiment & reduced borrowing costs drive Australian property sector rebound
Economists and property commentators alike are noting that the stronger than expected property market conditions seen in the second half of 2020, are set to continue over the next two years.
As COVID-19 restrictions, border control and lockdown measures end – and interest rates remain the lowest they’ve been – the Gold Coast’s property market is gearing up for a strong season in the lead up to Christmas, continuing into the 2021 New Year.
ANZ’s Consumer Confidence index is the strongest it has been in 8 months. Westpac-Melbourne Institute’s Consumer Sentiment index reflects a rebounding confidence with results for November 2020 reaching the highest level in seven years, shaking off any impact of the recession and pandemic.
For the week commencing 7 December 2020, Westpac lifted its growth forecasts for 2020 and 2021, whilst lowering its unemployment forecast. This comes on the back of stronger than predicted GDP growth and a surge in consumer spending for the September quarter. A key takeaway from this week’s “Westpac weekly“, is that the recent seven hear high in consumer sentiment will be sustained into 2021, together with the increased housing market momentum. They also note a likely upward revision to the government’s net migration forecasts.
Key drivers of Westpac’s positive outlook will be household income growth; the savings rate; consumer confidence; dwelling prices; and attitudes to household debt. Westpac-Melbourne Institute data also includes the Time to Buy a Dwelling and House Price indices, both of which saw large increases over the past month. The Time to Buy a Dwelling index reached its highest level since November 2013 last week and increased by 11% relative to a year ago.
The House Price Expectations index rose by 12% over the month, and although it remains 7.3% lower than its March 2020 level it is now 5.5% above its long-term average.
CoreLogic’s monthly Home Value index, which came out last week, rose for a second consecutive month across Australia (0.7% in November and 0.2% in October). The index for Brisbane (including Gold Coast), has seen a 4.14% increase year on year for all dwellings.
Realestate.com.au’s Cameron Kusher notes that a strong consumer mindset is “a boon for housing this festive season”, and on consideration of the above data, “it is looking likely that property sales will increase and prices will also rise”.
He continues, “we have also seen people limited in how they can spend their money with domestic travel limited and overseas travel not possible. Household saving levels have also hit record highs.”
“When restrictions on expenditure are coupled with historic low borrowing costs, it stands to reason that among the types of luxuries people may be looking for are a nicer home given it may be achievable with similar or even lower mortgage repayments.”
In line with the national data, local agents on the Gold Coast are reporting high sales volumes, driving price growth. This has been underpinned by record levels of enquiry seen over the past few months since mid-2020, further strengthening in the lead up to Christmas. Gold Coast enquiry and sales are being buoyed by a very active local owner occupier market, together with renewed interest from interstate buyers looking to relocate or invest in the attractive Gold Coast market, where rental vacancies are at record lows.
At the Vue Terrace Homes community in central Robina (pictured), where the final collection of completed homes is now selling, development manager, Darrell Irwin echoes the positive sentiment being reported by local agents.
“Enquiry levels have never been higher for Vue, and we are seeing a marked increase in sales to local owners looking to upgrade their lifestyle.”
“This includes downsizers looking for a secure, low-maintenance resort style lifestyle, through to first home buyers who are being helped into a new home by the incredible incentives available – together with the fact that it is now cheaper to buy in Vue than it is to rent.”
Young professionals working from home also love the convenience and connectivity of Vue, including Anna Richards (pictured), who said, “now that we have found the perfect place to work from home, Morgan and I have the perfect work-life balance and no matter how long the pandemic continues, I can’t see us working from a traditional office again any time soon.”
All three bedroom plus media terrace homes featuring private, secure courtyards, are now ready to move into in this sought-after amenity-rich precinct. The final stage in Vue is now selling from $629,000. The Vue sales & display centre is open daily from 10am to 3pm, and virtual inspections are also available for those not able to make it in person. Read more about Vue here.
Sources:
Westpac weekly, 7 December 2020
CoreLogic, Home Value Index, November 2020
Realestate.com.au. Strong consumer mindset a boon for housing this festive season
