Most property investors aren’t concerned with the current state of the market, with many believing that the worst of the price falls in Sydney and Melbourne have already happened, a new report has found.
ME’s Household Financial Comfort Report reported the results of a survey where investors were asked what is likely to happen to the value of their property in the next 12 months: 86% expect to see values increasing or remaining around the same, with 18% expecting them to rise a lot, 34% predicting they’re rise a little and 34% believing they won’t change.
Similar trends were noticed when looking specifically at Sydney and Melbourne, which recorded 85% and 90% of investors respectively believing values will not decline in the year ahead.
ME’s consulting economist Jeff Oughton says the general sentiment is that the worst has come and gone – and most are waiting to ride out the current correction rather than viewing the market as crashing.
“They’re looking for a bottom in the property market over the next year … and I think that’s a reasonable forecast,” Oughton says. “There’s still downward pressures there, but there’s no traditional triggers of any crash.
“The great bulk of investors have made a lot of money over the last 10 years and are happy to ride out a correction.
“They’re looking for some turn around, generally over the course of this year with the vast majority thinking things could end up higher at the end of the year than they are now after the correction of the last year so,” he says.
The Household Financial Comfort report – which surveyed 1,500 people about how they perceived their own finances in the second half of 2018 – finds that the proportion of Australians feeling financially secure has risen.
The 15th biannual report found income gains, easing living costs and increased savings were key drivers in households’ feeling more comfortable.
“Most households are well supported by both [subdued] wage gains and stronger jobs growth — albeit underemployment remains high,” the report says.