Seller confidence rebounds as buyer demand continues to surge

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Research released from Westpac shows more Australians are thinking about selling their home now than before the pandemic, with low interest rates, improved consumer sentiment and strong economic forecasts fuelling confidence in the housing market.

More than a third (35%) of homeowners are planning to sell in the next five years, with over one in ten (12%) already in the process of putting their house on the market or planning to do so in the next 12 months.

This uplift shows an increase of five percentage points in selling intentions from last quarter, and more than double the number of homeowners that were planning to sell prior to COVID-19[1].

Despite this increase, the research found more than half (51%) say they’re actively holding off from listing their property straight away.

With 22 per cent of Australians planning to buy a first home in the next five years, competition with other buyers (30%) and a lack of supply (21%) were also cited among the top challenges for sellers.

Westpac’s Managing Director of Mortgages, Anthony Hughes, said there has been a big shift in Australian property aspirations over the last 12 months.

“Home ownership 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 backyards and balconies.

“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.

“The low interest rate environment, upbeat consumer sentiment, and improving economic outlook is also underpinning stronger seller confidence as we head into 2021. This will no doubt be welcome news for buyers eagerly awaiting more homes to come on the market,” said Mr. Hughes.

According to the research, one in five homeowners are selling for reasons directly relating to the pandemic – like accommodating working from home more (11%). One quarter (25%) are also seeking more space.

Westpac Senior Economist Matt Hassan said demand for housing has surged following the improved economic outlook and is running well ahead of supply.

“It is absolutely a seller’s market at the moment. Sales have seen a big lift over the last four months and are up over 36 per cent 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,” said Mr Hassan.

While two thirds (66%) of sellers agree moving costs are a big barrier to selling their home, the majority (87%) of homeowners intend on making upgrades in preparation for sale.

On average, they expect to invest around $32,000 for covering things like minor repairs (44%), fresh paint (44%) and upgrading a kitchen (19%) or bathroom (19%).

Homeowners anticipate their property will be listed for about five weeks, with half (50%) expecting a private sale.

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[1] In September 2019, 17% of homeowners were planning to sell a home in the next five years, compared to 30% in October 2020 and 35% in February 2021 (Source: Research commissioned by Westpac, conducted by Lonergan Research).

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