Sentiment Falls, Australian Property Buyers Fatigued

A new survey by Finder, has noted that buyer sentiment towards purchasing property has plunged to a six-month low. Buyer’s fatigue has sunk in as hopeful dwelling hunters reflect on the pricing surge that has swept the nation.

The report indicated that buyer sentiment has dropped to 39% in June, this reflects the number of Australians who believe now is an opportune time to buy. This result sits in stark contrast to December 2020, which showed that 67% expressed a favourable sentiment towards property purchase.

The last time sentiment was as low was in April 2020 (42%), the preliminary outbreak of the pandemic and lockdown. At this time, fear campaigns circulated around a 20-30% drop in property values instilled a sense of nervousness amongst buyers and stripped confidence in the market. Today, we find the weakened sentiment is not built around fear, but lies in the lack of affordability.

Record cheap funding and federal incentives to bolster affordability is not enough to sway sentiment as housing prices move further out of reach to buyers. May 2021 marked a 2.2% growth in national dwelling prices, with March locking in a 2.8% jump in the month alone. We are witnesses housing price growth far outpacing income growth.

It is likely that housing growth will continue well into 2022, however the rate of growth may likely see tempering. There are a handful of metrics which may see cold water thrown onto sizzling market and they sit around fundamental changes to tighten lending standards, fixed mortgage rates and continued stalling in population growth with closed boarders remaining, may see an over supply of stock on the market.

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