One In Three Homeowners Want To Sell
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One In Three Homeowners Want To Sell

Seller confidence rebounds as buyer demand continues to surge.

By Terry Christodoulou
Mon, Mar 8, 2021 5:07amGrey Clock 2 min

Research released from Westpac shows that one in three Australians are thinking about selling their home with the effects of the pandemic easing and low-interest rates improving market sentiment.

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

The uptick in seller confidence shows an increase of five percentage points when compared to last quarter, and double the number of homeowners that were planning to sell prior to COVID-19.

However, despite the increase, the research found 51% say they’re actively holding off from listing their property straight with the competition with other buyers listed among the top challenges for sellers.

“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,” said Westpac’s Managing Director of Mortgages, Anthony Hughes.

“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.

Further, one in five homeowners are selling for reasons directly relating to the pandemic including, accommodating working from home (11%) while (25%) 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,” said Mr Hassan.

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Mortgage holders should brace themselves for more pain as the Reserve Bank of Australia board prepares to meet tomorrow for the first time this year.

Most economists and the major banks are predicting a rise of 25 basis points will be announced, although the Commonwealth Bank suggests that the RBA may take the unusual step of a 40 basis point rise to bring the interest rate up to a more conventional 3.5 percent. This would allow the RBA to step back from further rate rises for the next few months as it assesses the impact of tightening monetary policy on the economy.

The decision by the RBA board to make consecutive rate rises since April last year is an attempt to wrestle inflation down to a more manageable 3 or 4 percent. The Australian Bureau of Statistics reports that the inflation rate rose to 7.8 percent over the December quarter, the highest it has been since 1990, reflected in higher prices for food, fuel and construction.

Higher interest rates have coincided with falling home values, which Ray White chief economist Nerida Conisbee says are down 6.1 percent in capital cities since peaking in March 2022. The pain has been greatest in Sydney, where prices have dropped 10.8 percent since February last year. Melbourne and Canberra recorded similar, albeit smaller falls, while capitals like Adelaide, which saw property prices fall 1.8 percent, are less affected.

Although prices may continue to decline, Ms Conisbee (below) said there are signs the pace is slowing and that inflation has peaked.

“December inflation came in at 7.8 per cent with construction, travel and electricity costs being the biggest drivers. It is likely that we are now at peak,” Ms Conisbee said. 

“Many of the drivers of high prices are starting to be resolved. Shipping costs are now down almost 90 per cent from their October 2021 peak (as measured by the Baltic Dry Index), while crude oil prices have almost halved from March 2022. China is back open and international migration has started up again. 

“Even construction costs look like they are close to plateau. Importantly, US inflation has pulled back from its peak of 9.1 per cent in June to 6.5 per cent in December, with many of the drivers of inflation in this country similar to Australia.”

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