Rising positive sentiment and sales activity a reflection of eased social distancing measures and support from JobKeeper and JobSeeker payments.

“For example, having more people through a house can allow viewing on individual properties to take less time.
“Even though consumer sentiment is relatively low, it has bounced back significantly over the past few weeks, with May results of consumer sentiment regaining 80 per cent of what was lost in the index over March.
“For now, it would seem that people are more confident in selling property.”
During the past seven days, newly listed homes climbed by 11.85 per cent while mortgage activity rose by 2.78 per cent compared to the previous week, a further sign of improving sentiment, said Ms Owen.
“This shows that confidence is returning to market off the back of eased social distancing restrictions, and government policies which have helped to soften the blow of a negative shock to demand,” she said.
“This improvement to consumer sentiment is likely flowing through to some upside for housing markets.”
The Westpac-Melbourne Institute consumer sentiment index showed sentiment among buyers rebounded in May, jumping by 31.8 per cent and reversing most of April’s 26.6 per cent drop.
The rebound was across all states, led by Western Australia which is up by 68 per cent.
Consumer expectations for house prices rose only slightly at 4.6 per cent, but it was a dramatic turn around from the very large drop of 50 per cent in April.
Victoria bucked the modest rebound with consumers expecting a further price drop of 11.8 per cent.
“It is extremely noteworthy that in the midst of this exuberant rebound in confidence, prospects for house prices have hardly budged,” said Westpac’s chief economist Bill Evans.
“The Melbourne housing market looks vulnerable to the sudden slowdown in foreign student and migrant inflows and has already seen some early price slippage. The situation clearly bears watching closely.”
Ms Owen said the rising positive sentiment and sales activity was a reflection of eased social distancing measures, and supported by measures like the JobKeeper and JobSeeker payments.
“The real test for the housing market will be in late September, once lenders lift their repayment leniency policies,” she said.
“If employment and economic conditions have not started to recover by this point, this could see a rise in distressed properties to market, and downward pressure on values.”