Forecasting projected property values is always difficult, even before a global pandemic, but how much can you expect to get out of your home this upcoming year?
Australians have managed to survive a year of undeniable hardships, many losing their jobs or faced their own personal battles as a result of COVID-19. However, many are now expressing optimism about the future, and Australia’s economic climate is looking stronger than previously predicted.
According to Tim Lawless, CoreLogic’s Head of Research, while national housing values have fallen 0.7% in the June 2020 property market update, these falls have remained ‘mild to date.” These losses are expected to be regained by the beginning of 2021, giving sellers the opportunity to capitalise on increasing property values.
Aussie consumer confidence is high, according to the Westpac-Melbourne Institute Index of Consumer Confidence, with a 17.6% increase since the end of August, taking the ranking to its strongest position since November 2013. Auction clearance rates around Australia have stayed consistently reliable, a positive indication of a growing property market.
More importantly are the Reserve Bank’s historical rate cuts, down to just one tenth of a percent, which will allow buyers the opportunity to shop around for some of the best repayment options seen in the past 30 years. This means more Aussies are refinancing and looking for more affordable housing opportunities, giving younger individuals and investors the confidence to get into the market, either through buying or renting.
As Adrian Kelly, President of the Real Estate Institute of Australia (REIA) says, “The increase in loan commitments reflects low interest rates, improved consumer sentiment about purchasing a home particularly amongst first home buyers and response to HomeBuilder.” As more individuals enter the housing market, competition in capital cities will increase and according to ANZ Bank, a growth rate of 9% is expected for 2021, adding thousands onto the valuation of your home.
Ultimately, what will underpin the value of the property market will be the response to the evolving COVID-19 pandemic. However, with the delivery of a vaccine in the first half of 2021 anticipated, the nation is holding its breath and for the moment carrying on as per the new normal.
Overall, a unique combination of factors are shaping up to create a perfect storm of opportunity for anyone to make the most out of their own situation and look for that new home or to begin thinking about entering the property market. The next year is the time to begin thinking about selling or upgrading to your dream home!