5 property trends for the Australian real estate market in 2021
January 21, 2021
Despite COVID-19 sending the nation and the stock market into a frenzy, the Australian real estate market bounced back in stellar fashion, surprising nervous sellers and apprehensive buyers along the way.
Recession, unemployment, and business closures headlined the news in 2020, meanwhile, Australian property investment remained resilient — not just surviving, but thriving.
With the initial shock of the pandemic behind us, and prospective homebuyers itching to take advantage of government incentives and record-low interest rates, all signs are lighting up green — so long as the country avoids another curveball, the value of Australian real estate is perched to keep climbing.
Keep an eye out for these predictions in property trends for 2021:
1. Demand to purchase will remain
For some, ongoing lockdowns and restrictions meant job losses and financial instability. For others, it presented a once-in-a-lifetime opportunity to water the money tree.
In fact, personal savings reached an all-time high of 22.10 per cent in Q2 2020, according to Trading Economics.
First-time homebuyer incentives and near non-existent interest rates in 2021 are ensuring that, despite global financial nervousness, Australian property demand remains high and the Australian real estate sector continues to blossom.
2. New housing market will continue to surge
Fuelled by nationwide stimulus and government housing schemes like HomeBuilder, the new property market has maintained its upward trajectory, reaching heights not seen since December 1999.
Between October and November of 2020, notwithstanding tough lockdowns, the Australian Bureau of Statistics announced a 2.6 per cent rise in new Australian property approvals (commercial and residential) — a trend that has transitioned seamlessly into early 2021.
3. Rental markets to recover
City-based rental properties faced challenges in 2020; a lack of international students and migrants, and young renters moving back with their families reversed what was previously all-time-high demand.
Fortunately, the inner-city trend is set to reverse in 2021, with conditions expected to slowly recover as interstate and international borders begin to reopen.
On the flip side, demand for outskirt and regional rentals exploded in 2020 — in Byron Bay, for example, tenant numbers skyrocketed 42 per cent.
4. Regional property investment rises
As working from home became the norm, millions of Australians contemplated moving away from expensive metropolises and out to more affordable, less restricted regional areas.
With such a visible shift, housing prices in regional Australia rose at a higher annual rate than in capital cities for the first time in more than 15 years.
According to CoreLogic data, regional home prices soared almost 7 per cent, a significant jump compared to the 2 per cent growth in capital cities.
With remote working still common, and cheaper property opportunities beckoning buyers, the regional transition is poised to continue into 2021.
5. Australian property prices will continue to soar
The Australian housing market has remained resilient in 2020, fuelled by strong demand and bottom-of-the-barrel interest rates.
As things stand, Australia’s current interest rate is a mere 0.10 per cent, an all-time low.
In the current economic climate, with the stock marketing cycling through wild peaks and troughs (highlighted by the ‘Corona Crash’ of March 2020), property ownership has become associated with stability and security, more than ever before, pushing the real estate market toward record highs.
Need property advice to guide you through 2021?
For guidance on investing in Australian property and managing real estate portfolios for 2021 and beyond, contact LDB.
Our team of financial experts are dedicated to advising you on safe, secure, and high-returning investments.
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