Australia’s property boom is going from strength to strength, according to the latest figures from industry analysts Herron Todd White (HTW).
Their latest report, covering May 2021, has identified what they call the “unsung heroes” of Australia’s property market, covering offices, residential and rental sectors.
Sydney’s office market, Melbourne’s ‘bridesmaid’ suburbs and regional Queensland were singled out as points of difference in a marketplace that is increasingly expensive and difficult to get into for investors.
The residential sector in particular was cited as being in full boom, with HTW’s National Property Clock placing every area of the country except for the Northern Territory and Bundaberg as being between a ‘rising market’ and ‘peak of market’, and no area of Australia being in decline.
“The current strong property market has clearly been fuelled by low interest rates and consumer confidence,” said Herron Todd White CEO Gary Brinkworth. “At this stage, the market has continued to perform strongly and may well do so through the balance of 2021.”
With prices at an all-time high and rental markets yet to recover, it might seem logical for some people to sit tight on their property buying intentions until this boom subsides. Brinkworth, however, suggests that is too early to tell whether the current state of the rental market is here to stay.
“While rental stock may shorten and therefore lift yields especially in some regional markets, we may have to wait until migration returns to pre Covid rates before we see any real impact on the rental market,” said Brinkworth.
The office market has struggled to recover post-COVID, for obvious reasons. Many have cited the new hybrid working model as a death knell for traditional offices, but Brinkworth is confident that we will see Australia’s CBDs recover in the long-term.
“Running a business ourselves with many offices, especially in capital cities we understand the value our team members are placing on flexible working,” he said. “From our experience and as a mature well established business we have seen engagement and productivity improve.”
“Having said that, we are concerned about ‘Covid Fatigue’ and the need for greater collaboration especially for new growth opportunities. We think, in time the pendulum will swing back towards an office environment. How long it will take and to what degree are the key questions.”