With 2020 almost behind us we see many talking up 2021 already. Reality is, this coming year is going to remain difficult, financially and emotionally for many organisations across the globe. The property market took a huge hit as a result of this recent health scare, but has not yet felt the full effect of the pandemic driven recession yet. We can expect to start feeling it nationally in 2021. At Real Estate Downunder we don’t take to predicting the weather or the future, we like work it as it comes. However, we do like to ensure we make the best of any situation. So with foresight, and forward-thinking we intend to make the most of what is ahead. Nothing is impossible!
Some of the more permanent changes from COVID-19 will be an acceleration of working from home, remote working and remote learning. House prices are set to bottom out by June 2021, helped by improving affordability, but banks predict a national recovery is likely to be held back by high unemployment that is expected to remain above 7 per cent until 2022. While mortgage deferrals allowed by lenders will help stem large-scale forced sales, weaker household income, lower population growth and a “collapse” in the rental market would depress the market over the coming years. This last point is interesting as CoreLogic is indicating prior to Christmas a strong national demand in the rental sector. Mid-2020 we were told the national property market was going into decline with prices sliding up to a possible 20%. This did not happen with most capital cites starting to show signs of recovery. Adelaide & Canberra has remained strong with Brisbane remaining steady with predictions of Brisbane property prices set to rise significantly.
2021 Early Indicators
- Consumer confidence has been consistently improving as has business confidence
- More buyers and sellers are in the market and national transaction numbers have increased consistently.
- Despite what we hear and see the banks are actually keen to write new business as long as the capital/lending ratios are right.
- Bank loan deferrals have been consistently falling – there’s little likelihood of an avalanche of forced mortgagee sales as earlier predicted.
- Historically low-interest rates and the “guarantee” of rates remaining low for at least 3 years, will give home buyers and commercial investors’ confidence
- Strong jobs creation through government stimulus, rising consumer confidence and improving business confidence (leading to spending and employment) will underpin the housing markets.
- It would appear that more vendors may be willing to test the market in 2021, particularly given how many buyers are currently searching ready to purchase in 2021!
Stay healthy, stay safe and most of all stay focused!