Property sentiment on the rise

According to ANZ Research’s head of Australian economics, David Plank, the lift in sentiment has been driven by expectations of a rate cut from the Reserve Bank of Australia (RBA) and a shift in outlook for the housing market.

“Consumers are upbeat about both their personal outlook and the economy in general,” Mr Plank said.

Further to this, sentiment has been buoyed following the federal election, with certainty now provided to the direction of property policy.

While the Labor Party would have limited negative gearing to new housing from 1 January 2020 and halved the capital gains tax discount on all assets purchased after that date, the Liberal Coalition had no such plans and has since appointed a new minister for housing, along with several other key cabinet changes.

Building on comments from CBA CEO Matt Comyn that the bank has already seen a surge in home loan applications via both the proprietary and broker channel following the Coalition government’s election victory, several representatives from the property industry have also suggested that the market is more optimistic now.

‘More sales in the last few weeks than in the last few months combined’

Peter Grant, director of real estate firm RPM Group, commented: “With confidence back in the market, we’re seeing projects recording more sales in the last few weeks than they’ve seen in the last few months combined.

“Buyers in Melbourne’s land market who had waited for the federal election, price corrections and confidence to return now have all three and are committing to purchasing before the next upward cycle commences,” he said.

Likewise, Leonard Teplin, projects director at real estate agency Marshall White, said that its success rate at auction last week was 64 per cent, “the highest seen by Marshall White since August 2018”.

Moreover, the average bidders per auction was the highest of any weekend in 2019, at 2.8 per dwelling, he said.

“Across the business, the total numbers inspecting established property increased by 16 per cent last weekend, a significant and immediate increase post-election.

“Similarly, the volume of enquiry for off-the-plan property over the last seven days has increased 18 per cent,” Mr Teplin said.

He added: “Anecdotally, one in five buyers who we spoke to last week who had previously stated they were “waiting to see” have now indicated they are prepared to actively re-engage.”

‘The most interesting week of 2019 for the commercial office sector’

CBRE Melbourne Middle Markets director Scott Orchard said that the commercial division of the business had seen “a significant jump” in enquiries in the week following the election, with the total enquiries sitting at 198 for the week, up from an average of 80 in March and 118 in February.

“The last seven days have arguably been the most interesting for the commercial office sector of 2019,” he said.

“Since Scott Morrison has retained government, we have observed a noticeable change in market sentiment and enquiry levels. The influx of buyer enquiry has been  significant when compared to the early months of the year.

“There is a general sentiment of tenants, owners and landlords wanting to ‘get back to business’ with a number looking to pursue further acquisitions or take advantage of the current pricing levels. Many are already factoring in an interest rate drop and are strategising their portfolio needs accordingly.”

Meanwhile, Andrew Leoncelli, the managing director of CBRE Residential Projects Victoria, added: “We have seen an immediate shift post-election with web traffic across Melbourne Square in the CBD and M City in Clayton spiking 300 percent last week, while Melbourne Square also recorded 13 sales over the weekend – the highest number of sales achieved in a single weekend for over nine months.”

Luke Berry, director of sales and marketing at property development group Thirdi, also commented that appointment requests at the Sydney-based development firm had risen by 200 per cent since the election.

“It may just be a coincidence; however, it seems that with the election out of the way and some stability now in government, many of the potential buyers that were once sitting on the fence and waiting to see what happens are now confident to have that serious conversation about proceeding with a purchase,” he said.

“I know it’s an early call; however, this is a great indication for what lies ahead, and for developments like ours that are located in good areas and nearing completion, I think the market will be surprised how quickly they will be snapped up.”

[Related: CBA reports post-election spike in mortgage applications]