After a particularly challenging year, Australia’s property market is tipped for growth, a property expert predicts.
“A resilient housing market that has weathered the economic pressures of COVID-19, together with lower interest rates, will give homebuyers and investors’ confidence,” said Andrew Bartolo, head of home loans at ME Bank.
“While there are still many challenges, including unemployment, job insecurity, and lower immigration, we’re seeing some positive signs – improved consumer confidence, stronger auction clearance rates, more transactions, and falling loan deferrals – generally considered proof of a healthier market.”
Bartolo forecasted property prices to spike across multiple markets this year, with the private dwelling sector performing well.
He cited the bank’s recent survey of 1,500 homeowners, in which 46% of respondents said that they expected the value of their properties to rise this year compared to the 5% who forecasted the value to decline. The sentiment was a substantial shift from their June survey where only 22% anticipated dwelling prices to increase and 25% predicted a drop.
Bartolo also expected pent up demand to wash through early 2021 as coronavirus restrictions began to ease.
“More investors will re-emerge in 2021 in search of income and capital growth,” he said. “Record low interest rates will drive momentum across the market.”
Bartolo added that first home buyer activity will continue to gain steam after a “brief dip in property prices” in 2020, thanks to several factors.
“Historically low interest rates, stamp duty exemptions, government grants, and the absence of foreign investors will continue to propel first home buyers into action,” he said.
Bartolo also anticipated a strong supply-side push as “a rush of fresh real estate listings hit the market.”
“More and more listings will return to the market by patient sellers who have waited all year to put their homes on the market, which will be quickly snapped by eager buyers,” he said. “Early 2021 is expected to be a bumper property season that will rival the traditional spring frenzy experienced in previous years as buyers respond to a late surge in auction listings.”
Bartolo said this renewed buyer and investor confidence in the housing market will pave the way for more competitive home loans.
“Competition in the home loan market will continue to benefit consumers looking for a good deal,” he said. “Many lenders have sharpened home loan rates to attract and retain customers.”