Spring selling season will be dampened under COVID-19: ME's Andrew Bartolo

Spring selling season will be dampened under COVID-19: ME's Andrew Bartolo
Spring selling season will be dampened under COVID-19: ME's Andrew Bartolo

EXPERT OBSERVATION

The outlook for the property market is expected to be quieter this Spring compared to previous seasons, but buyers are still there, according to home loan lender, ME.

I shared my spring property predictions:

The property market notoriously blooms in spring with a flurry of listings and buyers preparing to pounce.

But this season will be different: the property market will quieter due to the impact of COVID-19, particularly in Melbourne.

Despite some more listings this Spring and record low interest rates, economic concerns will dampen demand.

Plenty of challenges remain including high levels of unemployment, job insecurity and lower immigration, impacting people’s willingness to transact in property.

Many Australians are also on home loan repayment pauses. The gradual end of this type of support will be a critical juncture for the property market going forward.

Demand: first home buyers pounce, dreams of a sea or tree change to become reality

In terms of demand, buyer activity is expected to be overall lower than previous spring buying seasons, but buyers are still there and have a strong appetite for potentially bargain buys.

ME has seen an influx of first home buyers and expects this to continue. Potential for price falls, reduced investor activity together with historically low interest rates and government support are propelling first home buyers into action.

COVID-19 has also led to a re-assessment of life priorities. New remote and flexible working arrangements have made buying in regional areas a more feasible and affordable lifestyle option, and as such we may start seeing more buyers making their move this Spring.

According to ME’s latest Quarterly Property Sentiment Report, 45% of respondents said they were more likely to consider buying in a regional area, to save money and improve their lifestyle − rising to 60% of first home buyers.

Supply: A rush of fresh real estate listings on the horizon

The fallout of the COVID-19 pandemic and lockdowns has caused a short supply of stock. However, this Spring we may see an increase in listings come onto the market. I don’t foresee new stock overwhelming current demand, but certainly anyone listing will be met with a high degree of inquiry.

More competitive home loans

Competition in the home loan market will continue to benefit consumers looking for a good deal. Many lenders including ME have sharpened both variable and fixed home rates to attract and retain customers.

Andrew Bartolo is the ME General Manager of Home Loans

Tags: 
Spring Market COVID-19

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