What can we expect from property this year?
To start with, let’s recap on where we left off in 2020.
Despite the chaos of the pandemic, all capital city property markets aside from Melbourne actually experienced an increase in values over the year. Property in Melbourne finished down by only 1.17% for the year and is expected to make a full recovery, and then some.1
There are a number of positive indicators for a strong rise in property values this year; in fact, ANZ has predicted an average price rise of 9% across the capital cities.2 This momentum may also drive growth into 2022. Indicators include:
- Consumer confidence and business confidence have been improving significantly in recent months.
- Market sentiment and buyer activity is strong despite there being little good stock on the market in many cases.
- Auction clearance rates went from strength to strength in the final months of 2020 right around Australia.
- Transaction numbers have increased significantly, showing that more buyers and sellers are in the market.
- Lenders are keen to get new business and are working hard to attract customers with competitive loan deals.
- The chance of distressed sales on a large scale is almost nil, with bank loan deferrals falling consistently.
- The RBA has virtually guaranteed rates will remain low for at least three years and this should give buyers confidence to borrow.3
As we have seen, the Australian Government is committed to supporting Australia financially to ensure our economy stays afloat. According to property guru Michael Yardney, “… [the government] is protecting the wealth of the 70% of Australians who own their own home and use it as shelter. [It] well recognises the importance of feeling secure in your own home and how devastating to the economy it would be if property values fell significantly. I believe it has done its job well.”
SOURCES: 1https://propertyupdate.com.au/property-predictions-for-2022-revealed, 2https://bluenotes.anz.com/posts/2020/11/anz-research-2021-housing-market-update-recovery, 3www.abc.net.au/news/2020-11-03/rba-cuts-interest-rates-record-low-coronavirus-pandemic/12838760