What’s in store for the Australian Property Market 2021
Australia’s housing market looks to be turning around after home prices and sales had deteriorated from March to September. Sales stats at the end of 2020 were a pleasant surprise, creating forecasts of improvement in 2021.
Trends in the Australian property markets mirror the same trends you’ll see in the UK and the US housing market with home prices rising in all but the big cities.
Australia’s average home prices rose overall by .4% Yet Sydney and Melbourne saw rising prices too, up .4% and .7% respectively. See the Australia housing price forecast below for 2021.
What’s Causing the Rising Home Prices?
- continuing low mortgage rates
- Australia’s excellent response to Covid 19 transmission
- Jobkeeper wage subsidy mitigated the severe employment threat
- business reopening well, increasing optimism for the economy
- fewer homes for sale
- first time home buyers coming back
“Buyer demand is mostly being fueled by a surge in owner-occupiers rather than investors, looking to take advantage of historically low interest rates, generous government incentives and an increased state of normality.” said CoreLogic’s Head of Research Tim Lawless.
Australia Battling Covid 19 Beautifully
With some regions reporting zero cases of recent, it will be easy for buyers and lenders to feel good about the 2021 housing market.
Corelogic’s experts believe home prices will reach the pre-Covid pandemic highs during the next month or February. Home prices in Brisbane, Adelaide, Hobart and Canberra reached new all time highs at the end of November. See the price chart below.
As Australia enters its hottest summer months, buyers are out looking for affordable homes. As supply slips buyers will be willing to bid up to capture a home.
Australian home price change. Screenshot courtesy of Corelogic.com.au
As the vaccinations begin to lift Aussie spirits, we can see the Australian housing market begin to thrive in 2021. As construction rebounds, we might see prices moderate a little.
2021 Forecast a Little Brighter
ANA predicted housing prices would continue a decline to finally bottom out in June 2021. Yet, the decline has ended already.
They believed the Australian housing market recovery would be curtailed by continuing high unemployment (above 7% until 2022). As we know via other housing markets, that unemployment among the poor doesn’t necessarily translate to lower home prices. The US suffers 6.7% unemployment (compared to Australia’s 6.9%) yet its housing markets are booming, at least in price.
Supply is a problem in all markets including the UK, Canada, Germany and the US. and that will crush sales for some time.
At least the number of new listings added over the last month rose by 25.2%, while total housing stock levels increased by less than 1%.
RBA was pessimistic about Melbourne home prices increasing before April 2021 (75%, 18/24), while one-third (29%, 7/24) expected the market to stagnate until 2022 or beyond. A lot of pessimistic views that are likely being revised right now.
Report by Gord Collins
If you are looking to buy property in 2021 get in touch with your local mortgage broker to secure a pre-approval.
