Property market outlook – will the recovery trend continue into 2021?
Even better, all the signs point to an ongoing recovery in 2021.
CoreLogic’s Head of Research, Tim Lawless says that if the current growth trend persists, we are likely to see home values pass pre-COVID levels as early as January or February1.
CommBank Senior Economist, Kristina Clifton2 is expecting “a solid pick-up in dwelling prices” buoyed by a strong recovery in the Australian economy over the next two years.
What’s supporting home values?
Several key factors are behind the bright outlook for 2021.
1. Interest rates at record lows
Home loan rates are at exceptional lows following a string of rate cuts by the Reserve Bank in 2020. CoreLogic research shows when rates have been cut in the past, it has seen property prices rise by as much as 8% in the following two years3.
2. Consumer confidence is at a 10-year high
Despite all the drama of 2020, by the start of December consumer confidence had hit its highest level since October 20104 supported by positive news on the economic front, and improvements in personal finances.
3. First home buyers seize opportunities
First home buyers have been flocking to take advantage of grants and incentives that can add up to tens of thousands of dollars. Australian Bureau of Statistics data shows more than 13,000 first home buyer loans were approved in September 2020 alone – a jump of 48% on the year before5.
Not only are first home buyers benefiting from an extra 10,000 places in the First Home Loan Deposit Scheme, which requires just a 5% deposit to get into the market, the popular HomeBuilder grant has also been extended to 31 March 2021.
First home buyer 2022 grants guide
If you're looking at buying your first home it's worth knowing what Government help is available. This guide will walk you through all the grants and schemes to help you save.
Right now, four of the eight capitals are still recording property values lower relative to their previous peaks.
That means there may be good buying opportunities to be had. Melbourne home values are still -4.1% below their March 2020 peak and Sydney dwelling values need to recover a further 3.9% before surpassing the previous July 2017 peak. Perth and Darwin values remain -19.9% and -25.7% below their 2014 peaks6.
Now is the time to act and get expert advice
Set a date to speak with your local Mortgage Choice broker today to know your borrowing power, and put the wheels in motion to start achieving your 2021 property goals!
