What is buyer sentiment and why does it matter?
Over the past week, a swathe of reports has been released that indicate buyer sentiment is on the rise across Australia. But what exactly does that mean?
Well, ‘buyer sentiment’ has a major impact on property sales and the prices that real estate commands.
So here’s a quick guide to buyer sentiment and why it matters.
What is buyer sentiment?
Often used by economists and property market analysts, the term ‘buyer sentiment’ refers to how people generally feel about the prospect of buying property.
When it’s positive, the average Australian feels pretty good about dipping their toe in the property market. When it’s negative, they’re a little more wary.
What factors are considered in buyer sentiment?
Buyer sentiment tends to take a big picture approach to the property market. It indicates that all things considered, people might be likely or unlikely to buy a property.
The elements that create this sentiment include factors like:
- Interest rates.
- The stability of the property market.
- Ease of access to finance.
- Government incentives.
But essentially it answers the question, in the current climate how likely is someone to buy a property?
Where buyer sentiment is now
After a tough year, buyer sentiment at the moment is very positive; this is highlighted by a series of reports, auction clearance rates and accompanying data from real estate websites.
So, let’s take a walk through some of the data…
ME Bank Report
According to ME Bank’s recent quarterly property sentiment report, which surveys over 1000 Australians, buyer sentiment has rebounded to pre-Covid levels.
The latest survey, conducted over the October quarter, found 38 per cent of Australians in the property market feel ‘positive’ about it – just four points below this time last year.
“Overall, Australians in the property market are showing greater optimism for house prices, compared to the past quarter,” the report notes, with 65 per cent predicting house prices will increase or stay the same in their region, while only 20 per cent expect a decline.
Westpac’s September Consumer Confidence index showed a similar rebound.
“On the question of whether now was ‘the time to buy a dwelling’, the index jumped eight per cent to 132, its highest point in seven years and a whopping 11 per cent higher than it was in November last year,” Business Insider notes.
REA listing viewings
As Australia’s largest real estate listing site, realestate.com.au gains a first-hand insight into how many people are viewing property online.
They note an average of 12 million people per month are currently visiting their site . That figure is up 37 per cent year-on-year, and indicates over 60 per cent of the adult population in Australia visited realestate.com.au in the first financial quarter of 2021.
At present the auction data indicates around three quarters of properties taken to auction each week are successfully selling.
And that’s a very positive figure that is on par and even slightly above the same period last year, although volume is reduced with Melbourne yet to rebound to the high auction numbers of last year.
What this means
Together, this data indicates Australians feel positive about property, and believe house prices will continue rising. As a property seller or buyer, it means now is a good time to consider entering the market as Australia’s enthusiasm for bricks and more is at a high.
If you’re considering selling your home, we can assist by offering your further detailed insight into sentiment and demand in your area, along with an accurate appraisal and sales strategy for your home.
You can contact our expert Eview Group agents here, or alternatively fill out the form below.