Well what a difference a week (or two) makes. Victorians are celebrating 13 straight days of zero Covid cases, a steady easing of restrictions, a more engaging global political environment, and even Melbourne weather is warming up. 🌞 This has created an injection of confidence into our lives.
Every economic or finance news report this week is showing positive signs. RBA has reported consumer spending is up, Matt Comyn, CEO of CBA reported a significant drop in loan deferrals, and consumer confidence surveys are all showing very positive signs.
ME Bank released its Quarterly Property Sentiment Report this week which says more people are predicting housing prices to increase but we are not yet back to pre Covid optimism.
We are starting to see this translate to increased buyer interest and especially amongst first home buyers enjoying lower interest rates. However, one of the biggest issues for many apartment owners at the moment is the high vacancy and low rental levels in the market. The opening up of businesses and the upswing in consumer confidence will translate to more jobs and better job security meaning renters are more secure financially. While this will help a bit, what the market really needs is more people wanting to rent and less apartments for lease and this want happen in any meaningful way until we get back to more travel for events, tourism, education, work and play. Domestic travel within Victoria and Australia will be a big help especially over Summer and for events (modified) which is Melbourne’s strong suit. International travel including education will be the next step but as that is vaccine dependent it is not likely to happen until 2022.
So let’s hope that Australia can create enough travel, and economic activity to lift the apartment rental market to mirror what is happening in the capital market.