How is the Australian Property market performing so far this year?

How is the Australian Property market performing so far this year?

Posted on March 3, 2021 by Mirren Property Investment

The Australian property market started the year on a high note as sales rose in December and continued towards January. Steady demand during a time of low availability has also caused property values to rise. Despite the restrictions caused by the pandemic, house prices rose very steadily.

With interest rates almost reaching zero, the economy giving away massive amounts of stimulus, and the pandemic reaching its end, we’re now seeing amazing development in the housing market. So what will happen in the next year or two? Experts weigh in and here are their predictions.

This chart from CoreLogic shows that all property markets other than Melbourne have easily gained what was lost in the pandemic. Melbourne is expected to reach the same gains in a matter of a few months.

Source: Corelogic February 1, 2021

Property experts believe that the market will perform very well this year. This has been shown by the increasing customer and business confidence in various states. Corelogic head of research Eliza Owen expects house prices to keep rising in the first half of 2021. Historically low interest rates will cause the surge of house prices to record new highs.

Auction clearance rates have gone up, not just in Sydney and Melbourne, but all around the country. Since there are now more buyers and sellers in the market, transactions have consistently increased. This propelled banks to provide for new business again.

Since the start of the year, we also saw bank loan deferrals falling consistently. The Australian Banking Association shows that deferred loans have plummeted from 493,440 in June to 169,677 in November. This is almost a 70% reduction.

The low-interest rates which will remain low for at least 3 years will give investors and homebuyers confidence. After the pandemic, there will be new jobs that will boost spending and improve the housing market.

Forecasts from economists at investment bank UBS predicted house prices to rise 5 percent to 10 percent this year — with potential gains of up to 10 percent. This is called an “up crash” thanks to the government’s homebuilder subsidy scheme which prompted a spike in construction.

Veteran housing market analyst Louis Christopher predicts that capital city house price will rise 5-9 percent in 2021, with Perth, Sydney, and Adelaide leading the strongest growths.

BIS Oxford Economic chief economist Dr. Sarah Hunter believes that demand shock around reduced migration will make apartments cheaper. The falling interest rates will make everything affordable and will spike transactions.

In the coming years, urbanisation will take a halt, as cities will re-asset their strength. The economy will no longer be boosted by major cities, but by various states in the countries.

With such positive changes in all aspects of the property market, it is best to decide your next investment property move. Contact us here or call us on (02) 8814 5275 to book your complimentary strategy consultation.

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