Westpac research shows Aussies ready to cash out of homes
More than a third of Australian homeowners are planning to sell their property in the next five years, driven by historically low interest rates and fervent buyer demand that is causing prices to skyrocket.
Seller confidence now is higher than it was prior to the COVID-19 pandemic, with 35% of homeowners considering selling by 2026, according to a new study by Westpac. One in 10 were already in the process of putting their home on the market or planning to do so within the next 12 months.
Several major banks, including Westpac, have predicted that property prices would spike by up to 10% this year and another 10% in 2022, according to a report by 9News. Despite that, however, Westpac’s study found that the majority of homeowners said they were holding off from listing their property immediately.
Many buyers, meanwhile, are looking for homes that prioritise outdoor space, according to Anthony Hughes, managing director of mortgages at Westpac.
“Homeownership preferences have evolved since the start of the pandemic, with Australians seeking more space, peace and quiet, as well as properties which offer outdoor living like back yards and balconies,” Hughes told 9News. “This is fuelling buyer demand and motivating more Australians to think about selling their current property so they can purchase a new home to better meet their future needs.”
Hughes said that increasing buyer demand could prompt more owners to sell, consequently opening up more supply.
“The low interest-rate environment, upbeat consumer sentiment, and improving economic outlook is also underpinning stronger seller confidence as we head into 2021,” he said. “This will no doubt be welcome news for buyers eagerly awaiting more homes to come on the market.”
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For now, sellers have the clear advantage, Westpac senior economist Matt Hassan told 9News.
“It is absolutely a seller’s market at the moment,” Hassan said. “Sales have seen a big lift over the last four months and are up 36% on a year ago, resulting in a significant tightening in supply, with listings across the major capital cities now at a 12-year low. The research suggests the situation will rebalance in coming months as more sellers come onto the market – however, demand is still expected to remain strong, driving a sustained lift in prices this year and next.”
Australian property prices are currently rising at the fastest rate in 17 years, according to data from CoreLogic – with “fear of missing out” one of the primary drivers of the boom.
“It is the perfect storm for house prices,” Steve Mickenbecker, Canstar Group executive of financial services, told 9News. “On the supply side, new listings through 2020 were well below the four preceding years and total listings now are also down as stock is absorbed before or as soon as properties hit the market. Owners are loath to put a house on the market even at high current prices, fearing they will miss the boat getting back in.”
