HOME BUYER SENTIMENT POSITIVE IN FACE OF COVID CRISIS
Home buyer sentiment remains overwhelmingly positive despite the economic impact of COVID 19 in Western Australia according to a new survey (The Urbis/UDIA Home Buyer Sentiment Survey) released by the Urban Development Institute of Australia (UDIA WA) and Urbis.
According to the survey, 48% of people are positive about purchasing a home in the current market and that figure climbs to close to 60% for those looking to purchase as an ‘owner occupier’.
The sentiment survey also clearly reflects the positive impact of recent federal and state government stimulus measures, increasing the likelihood of buying for 17% of people surveyed.
“The outcomes of this sentiment survey reflect the ongoing faith that West Australians have in the resilience of the WA property market and the importance of continuing to support buyers in securing a home that meets their needs,” UDIA WA CEO Tanya Steinbeck said.
“The property industry can continue to play a key role in the economic recovery for WA and people are obviously still keen to find opportunities to enter the market and secure a property,” Ms Steinbeck said.
“While respondents are expecting a potential dip in prices over the next six months as we continue to navigate the current crisis, the expectation of close to 60% of respondents is that we will see property prices increase in the next 18 months,” Ms Steinbeck said.
“Those expectations clearly reflect people’s understanding that property is a longer-term prospect when it comes to growth in investment,” Ms Steinbeck said.
When looking at the breakdown in demographics of respondents, single person households were even more positive, with 65% believing that property prices will increase in the next 18 months.
Urbis Director David Cresp says the survey highlights the importance of ensuring that we continue to provide diverse housing in WA.
“Most potential buyers are seeking a free-standing home (74%) however delivering a diversity of housing to the market remains critical. In particular the survey highlighted that downsizers aged 65-75 (42%) are increasingly looking to medium and higher density housing options.”
“The survey also looked at where people would look at buy,” said Mr Cresp.
“This highlighted the value of amenity with most of the top suburbs being high amenity suburbs that are close to open space, shopping and train stations.”
Mr Cresp says that positive sentiment coupled with an influx in people moving back to WA is further bolstering the WA property market.
“The most recent ABS data has confirmed that an influx in people are coming back to WA due to COVID 19,” Mr Cresp said. “For the 12 months to June 2020 total overseas net arrivals (travel) was 90,720 people. This compares to 35,160 people for the 12 months to June 2019.”
“This is not to say that all of those people will remain in WA permanently, with some passing through to other states, however our analysis of historical data shows that typically around 50% of these people will stay in WA,” Mr Cresp said.
“That proportion could be higher in the current context if we take into account global conditions and the relative safety of remaining in WA from a health perspective,” Mr Cresp said.
“If net overseas migration turns out to be this high it would be the highest level since the boom period of 2012 where net overseas migration was 50,800,” Mr Cresp said.
The data shows that the movement of people back to WA was the highest in the March quarter and had reduced significantly in the June quarter with WA’s hard border policy.
“This boost in population growth highlights why the residential vacancy rate in WA is low and why we have been seeing a reduction in the number of residential listings over the last 12 months,” Mr Cresp said.
According to UDIA WA the State Government needs a clear population strategy to ensure we harness the potential for a continued flow of people back to WA.
“Looking beyond our current border closure, we need to maximise the number of people that are likely to want to return or move to WA as a safe haven and a stable place to invest,” Ms Steinbeck said.
“That will need to be balanced with health security and that is why we need a clear, long term strategy so that we can continue to rebuild our economy successfully,” Ms Steinbeck said.
URBIS/UDIA HOME BUYER SENTIMENT SURVEY SNAPSHOT
500 people surveyed in July 2020
Overall market sentiment:
- 48% people surveyed are positive about purchasing in the current market
- 58% of people purchasing for owner occupation purposes are positive about the market
- 59% of people aged 21 – 34 are positive
- 32% singles person households very positive sentiment
- 26% couple households very positive
- 25% family households very positive
- 57% say prices will increase in next 18 months
- 65% of single person households believe prices will in increase in 18 months
What they want to buy:
- 74% want a free-standing home
- 42% of people aged 64-75 want medium or high-density housing
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