The real estate industry is showing signs of positivity for Australia with a number of industry leading publications posting strong property news throughout January 2021.
According to Urban Developer, housing market data has shown a fairly strong post-Covid recovery trend following a short, sharp slowdown inactivity through the middle of 2020. Australian housing values rose 2.3 per cent in the final quarter of the year, trending higher from a recent low in September 2020, to be just 0.1 per cent below the previous record high value in October 2017. Data from Corelogic reveals which housing markets have seen the highest value increases relative to their value at March 2020. At the capital city level, Melbourne, Sydney, Perth, Brisbane and Hobart saw some level of value falls close to the onset of Covid. By December however, Perth, Brisbane and Hobart housing values had surpassed their March 2020 highs. Home values across Darwin, the ACT and Adelaide have continually increased since March, with Darwin values up 8.3 per cent since the onset of the pandemic.
Another article from Urban Developer reveals that chief economist of Knight Frank, Ben Burston, said cities will remain the engine rooms of the national economy however regional areas will grow. “Regional cities like Wollongong, Newcastle, Geelong and the Gold Coast will see accelerated growth,” Burston said. “They have sufficient scale and critical mass of service sector jobs to continue to develop rapidly, while also benefiting from a tilt in lifestyle choices due to the pandemic that will see some people opting for a less CBD-centric working life.” Burston added hybrid work arrangements will transform offices into central places for collaboration, culture and connection while tenants seek more flexibility. Knight Frank Head of Residential Research, Michelle Ciesielski, said lockdowns and closed state and international borders have given people time to reflect on their lifestyles. “As a consequence, more and more people are seeking detached family homes and favouring waterfront and rural homes in particular,” Ciesielski said. Ciesielski added this will drive a strong demand for prime property and rentals with Sydney, Perth and the Gold Coast set to rise.
In terms of home lending, the Urban Developer reports that home lending has surged by 47 per cent since May as buyers seize on ultra-low borrowing costs and bet on a sustained recovery in residential property prices. The bounce has been driven by a premium on home-living during the pandemic, with owner-occupiers dominating the home loan commitments throughout that time. The surge in home lending follows four consecutive months of credit contraction to August and flat lending figures recorded across September and October. The total value of new loan commitments for housing hit $24 billion in November, a rise of 5.6 per cent on October and 23.7 per cent higher than the same month a year earlier. Across the year, Sydney prices gained 2.7 per cent, Brisbane 1.1 per cent, Perth 1.9 per cent, Adelaide 5.9 per cent, Hobart 6.1 per cent, Darwin 9 per cent and Canberra was up 7.5 per cent.
Here’s to a thriving 2021, and a positive new outlook on the future.
Sean Porlier and Guntur Reid are Director’s at ARG. We are a property partner to many finance and investment strategists throughout the country.