More than a third of homeowners are planning to sell their property in the next five years as historic-low interest rates and extraordinary buyer demand sends prices soaring.
New data from big four bank Westpac found seller confidence was higher now than it was prior to the pandemic, with 35 per cent of homeowners considering by 2026.
One in ten were already in the process of putting their home on the market or planning to do so in the next 12 months.
Several major banks – including Westpac – have forecast property prices to rise by as much as 10 per cent this year and then 10 per cent again in 2022.
Despite the favourable forecasts, Westpac’s research found the majority of homeowners said they are actively holding off from listing their property straight away.
Anthony Hughes, Managing Director of Mortgages at Westpac, said the bank has seen a lot of buyers opting to purchase homes that prioritised outdoor spaces.
“Home ownership preferences have evolved since the start of the pandemic, with Australians seeking more space, peace and quiet, as well as properties which offer outdoor living like backyards and balconies,” Mr Hughes said.
“This is fuelling buyer demand and motivating more Australians to think about selling their current property so they can purchase a new home to better meet their future needs.”
The flipside to incredible buyer demand, explains Hughes, is that it may prompt more owners into selling and will therefore open up more supply.
“The low interest rate environment, upbeat consumer sentiment, and improving economic outlook is also underpinning stronger seller confidence as we head into 2021,” Mr Hughes said.
“This will no doubt be welcome news for buyers eagerly awaiting more homes to come on the market.”
Senior economist Matt Hassan said the ball is very much in the court of sellers.
“It is absolutely a seller’s market at the moment. Sales have seen a big lift over the last four months and are up over 36 per cent on a year ago, resulting in a significant tightening in supply with listings across the major capital cities now at a 12-year low,” Mr Hassan said.
“The research suggests the situation will rebalance in coming months as more sellers come onto the market, however demand is still expected to remain strong, driving a sustained lift in prices this year and next.”
“It is the perfect storm for house prices. On the supply side, new listings through 2020 were well below the four preceding years and total listings now are also down as stock is absorbed before or as soon as properties hit the market,” said Steve Mickenbecker, Canstar Group’s executive of financial services.
“Owners are loath to put a house on the market even at high current prices, fearing they will miss the boat getting back in.”
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