The prospect of positive housing price movements, coupled with record-low interest rates, may drive many Australians to enter the property market, the latest data from financial comparison site Canstar has revealed.

The firm’s latest consumer pulse report has found that 64% of Aussies who are closely monitoring the property market anticipate prices to stay at current levels or increase further by 2023.

This sentiment is shared by 70% of Baby Boomers, or those aged 55 to 74, who may be keen on downsizing their homes. The majority of millennials (62%), Gen X (60%), and Gen Z (56%) also predict similar property price trends, with the age groups most likely to be looking to snap up properties.

“Home buyers are flooding into the market spurred on by the early signs of positive housing price movements,” said Steve Mickenbecker, financial services group executive at Canstar.

“For first home buyers, fear of missing out (FOMO) is back in the psyche with around three in every five millennials expecting prices to rise or at least hold stable.”

“Property price falls usually lag the start of recession and could still be ahead, but lenders are not expecting as deep or prolonged a correction as they were at the start of COVID-19, and confidence is on the rise all round.”

Mickenbecker said that buyers’ improved outlook and confidence have been driven by the country’s effective response to the coronavirus pandemic, a spate government grants, and the Reserve Bank of Australia’s (RBA) record-low interest rates.

“Repaying a loan with a rate around 2% is starting to make rent look expensive for first home buyers, especially when they are also receiving state and federal support to qualify for that first loan,” he said.

“The RBA won’t be reducing the cash rate this month, but it doesn’t have to with its generous management of quantitative easing holding lenders’ funding costs down and keeping borrowers’ repayments low.”

Last month saw the central bank slash the cash rate to an all-time low of 0.10%, with banks and lenders following with cuts to home loan, savings, and deposit interest rates.

According to Canstar’s data, 25 lenders have reduced variable home loan rates by an average of -0.17% since the RBA’s last cash rate cut on 3 November. A total of 63 lenders have also slashed 1,138 fixed rates by an average of -0.31%. The average variable rate is now at 3.34%, while the lowest variable rate is at 1.77% (60% LVR) or 1.99% (80% LVR).

The firm also found that 29 banks have decreased savings rates since last month. Bonus savings accounts have been reduced by an average of -0.16%, while regular savings rates went down by -0.19%. The highest savings rate is currently at 1.75%, available for four months before reverting to 0.30%, or 3% for anyone aged 18 to 29 with less than $30,000 in the bank.

Meanwhile, 51 providers have slashed 560 term deposit rates since 3 November by an average of -0.13%. During the period, six providers increased 21 term deposit rates by an average of 0.17%.