Consumer confidence in Melbourne is up, with a new survey by ME Bank showing that nearly four in five homeowners in the city believe that their house price will not decline in 2019. In addition, more than a third of Aussies are convinced that home values will grow, according to the Household Financial Comfort Report.
These results oppose the predictions of many economists that prices will dwindle anywhere from 3% in the next six months to a double-digit figure by the end of the year, according to an article published on realestate.com.au.
Homeowners might be actually right, because their positive outlook could help the property market move upwards. Unemployment is dropping, wages are starting to show signs of life and interest rates could be cut this year, according to Jeff Oughton, ME Bank economist.
“When you look at the owner-occupier market there’s virtually no negative equity — those who bought into the market very recently might have a little negative equity. But there’s been no trigger in terms of forcing people to sell,” he said.
Oughton welcomes the idea of a market U-turn, which will be advantageous to owners. However, he also said that the market had indeed weakened and is likely to experience more declines this year.
“That downward pressure will turn around at some stage, and I think households might be right about when. I can think of an optimistic scenario where the housing market will have bottomed out and started to rise again in the next year,” he said.
While the true condition of the property market is still up for debate, there were still positive signs observed, including an increased number of buyers at the start of 2019 compared to the end of 2018 — almost tripling in some parts of the city.
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