Investors ready to swoop on property market

The ME Quarterly Property Sentiment Report has been released, which gauges property market sentiment.

In particularly, property investor sentiment has risen strongly, with 58% of investors positive in Q1 2021, up from 43% in Q4 2020 and a low of 34% in Q2 2020 (green below):

54% of investors also expect property prices to rise this year, up significantly from 38% in Q4 2020 and a low of 21% in Q2 2020:

According to ME Bank:

“We fully expect to see property investors back in full force this year. Sentiment within this group is bouncing back, with low interest rates make investing in property a more attractive option.”

To date, Australia’s property rebound has been driven overwhelmingly by owner-occupiers:

I expect investors to join the party later this year, especially outside of Sydney and Melbourne.

Rental yields are attractive outside of the two major cities and rental growth is generally solid to strong outside of apartments:

When combined with record low mortgage rates (especially fixed):

The investment case is difficult to ignore.

Unconventional Economist
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Comments

  1. Hang on.

    Are these savvy investors? And shouldn’t they be snapping up? Not swooping.

    Something is not quite right here.

  2. Leith, can we flesh this out? If immigration is zero, what’s the specific demand source?

    OO have led the charge, but are they second homes or ex-renters? If it’s ex-renters, the investment case would be poor unless they’re betting on an international border opening very soon.

    Is there a demographic explosion in 20-35 year olds all looking to be FHBs?

    Where have the warm bodies come from and more importantly where were they living 6 months ago?

    • happy valleyMEMBER

      International borders opening by the end of calendar year, once enough yocals vaccinated here – Scotty The Impaler’s “doctor” Prof Brendan Murphy, head of the fed Health Dept and most recent former CMO, has said as much in the last day or so. Don’t worry about immigrants/uni students bringing in the virus or the latest and greatest variant – the economy comes first including Phil Lowe’s asset price bubbles and more wage slaves.

      • A vaccine with 60% efficacy which doesn’t stop you getting or transmitting the virus just waiting for an effective mutation to come along and make it worthless… I don’t think these vaccines are going to open the borders. The increasing array of new nasty (and probably vaccine resistant strains) are going to keep the borders shut despite what Scummo and the banks might want.

        • happy valleyMEMBER

          Don’t worry he’ll have a go and get a go and if it all goes pear-shaped, he’ll flick pass blame to the states. Class act.

          • Any other PM and I would say no chance, but Scummo is such a soulless grub it can’t be ruled out.

    • “Is there a demographic explosion in 20-35 year olds all looking to be FHBs?

      Where have the warm bodies come from and more importantly where were they living 6 months ago?”

      Yes, and with mum and dad.

  3. A property sentiment report published by a company that writes mortgages for a living…. no conflict of interest there!!

  4. Jumping jack flash

    Everything still looking very good.

    All eyes on the savings glut, all eyes on CPI.
    If we get CPI, all eyes on wages growth.

    The debt avalanche cometh. Globally synchronised debt hyperinflation

  5. right, so we have –
    1. owner-occupiers supplying initial momentum
    2. Investors chasing momentum
    3. Influx of new arrivals maintaining momentum once borders re-open

    All while the RBA drives servicing costs down, APRA looks the other way on lending standards and the government (maybe) gets the responsible lending regulations killed off.

    That should keep a rocket underneath house prices for the next 3-4 years.

    • Goldstandard1MEMBER

      All I hear is “Buy”. The rest be buggered. When it feels crazy, it’s about to blow. When? We are probably not talking years.