The gradual lifting of COVID-19 restrictions and the favourable market conditions are likely to keep potential buyers in high spirits, spurring activity in the housing market, according to the latest study by Savills.
Paul Craig, CEO of Savills Australia and New Zealand, said buyer sentiment will likely strengthen as confidence returns to the markets.
Around three in four property buyers globally are likely to continue their plans of buying a property. Meanwhile, roughly 90% of vendors still have plans to sell. Craig said this remains true in Australia as stock levels are beginning to increase.
"The market is coming off an extremely low base of listings, so whilst some say the higher stock levels coming to market will create great opportunities for bargains, I believe we're just seeing a return to normal levels, which should see us return to a balanced market," he said.
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Chris Orr, director for residential at Savills Australia, said while declining rental yields and capital values could signal pessimism amongst market players, factors such as low interest rates and government incentives make it ideal for buyers to break into the market.
"This has made it an even better time to buy in many cases than pre-COVID for investors and people wanting to upsize or just get into the market," he said.
Cath Hart, executive director at the Housing Industry Association, said the announcement of the government support schemes, particularly of the HomeBuilder program, will help reverse the fall in new home sales, improve market confidence, and boost lending.
“The housing finance data vindicates the timing behind the introduction of the stimulus programs, including the HomeBuilding Scheme and the Building Bonus Grant, to support the residential building sector,” she said.
New-home sales fell to their lowest level on record in March, before falling further in April and May. In addition, the number of project cancellations has risen to 26%, overtaking the 17% average recorded after the global financial crisis.