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From a buyer's market to a seller's: Sydney and Melbourne are projected to deliver 8-12 per cent capital growth in 2021
The landscape of the housing market has shifted rapidly in the past three
months from a buyer's market to a seller's market. With regards to COVID-19, several vaccinations are likely to be rolled out in 2021, providing confidence that
a sustainable solution will ultimately be found, and property market sentiment has surged.
Apartment prices have
underperformed detached houses over the past decade, especially in Melbourne
and Brisbane.
Pete Wargent, COO of
BuyersBuyers.com.au, says that property transactions will increase by about a
quarter in 2021 after a significant slump through the middle of 2020, backed up
by research data from RiskWise Property Research.
An unusual opportunity window to positively gear property investments
with solid capital growth projections in Australia's capital cities is rapidly bringing
property investor back to the market, according to Pete Wargent, COO of
BuyersBuyers.com.au.
Now is the
time to buy if you have a long-term strategy and want to take advantage of the
current property market situation where some houses are more than $200,000
cheaper than the city median.
Sometimes it seems crime does pay as houses in affected areas outperform
the market in Sydney and Melbourne.
The Bush or
the Beach? Which will it be? We identify which is best for capital
growth.
While the property market may look gloomy at this point of time,
certainly in Melbourne, it is expected to bottom in the first half of 2021 with
dwelling prices to rise relatively quickly thereafter.
Renters are in the perfect position to buy a house and start earning
equity, while actually paying LESS for their mortgage than they would paying
rent, thanks to ultra-low interest rates.
Since the onset of COVID-19, working remotely has become an 'accelerating phenomenon' and it's proving a great opportunity for homebuyers looking to take advantage of 'lifestyle' prospects instead of being tied to employment hubs.
While the unit market in high-supply areas were already in the Danger
Zone in terms of settlement, cash flow and equity risk, COVID-19 has only
served to increase the pitfalls of buying off-the-plan rental high-rise
accommodation.
The most resilient property market in the country will continue to enjoy solid price growth. Units, however, are underperforming the wider market
The ACT has been enjoying extremely strong employment figures which are a key driver in the ability of the property market to deal very well with negative shocks, such as the recent downturn, and to deliver solid price growth under ‘normal’ market conditions.
From a buyer's market to a seller's: Sydney is projected to deliver 8-12 per cent capital growth in 2021
The landscape of the housing market in New South Wales has shifted rapidly over the past three months from a buyer's market to a seller's one. Only three months ago homebuyers in Sydney were in solid position to leverage on the prevailing market conditions. This is, however, no longer the case, with a sharp increase in buyer sentiment and auction clearance rates.
Unexpected pandemic-driven relocation to the Northern Territory substantially increases demand and short-term price increases. Modest growth, however, is likely over the long term
The Northern Territory market has shown signs of stabilisation after many years of weak property market conditions, and is finally showing signs of revival.
The Sunshine State is shining: strong demand for detached houses and demand for outstanding lifestyle areas projected to deliver 6-10 per cent capital growth in 2021 for the south-east QLD market
The QLD housing market, and particularly houses in the popular areas of Brisbane, the Sunshine Coast, and the Gold Coast, held up well during COVID-19, with the coastal areas enjoying strong demand due to the increased ability to work from home.
Ultra-low interest rates, very affordable housing, and an effective response to COVID-19 are projected to deliver 5-8 per cent price growth in 2021
The SA housing market has been soft overall, with modest growth (except for certain inner-suburban locations), but is showing clear signs of improved buyer confidence, demand for housing and consequently price growth projections.
Lifestyle and a somewhat limited supply of houses will continue to drive more modest detached house price growth in Hobart
As previously projected, price growth in Tasmania has decelerated. Affordability issues, with preferred alternatives in Melbourne, created a situation where the Apple Isle became less resilient and the property market experienced decelerating price growth, despite the low supply of dwellings.
While lifestyle changes have improved the demand for housing in Hobart, the market is likely to experience only modest price increases from this point in the cycle.
The projected easing of the COVID-19 pandemic is now boosting sentiment in Victoria, and the Melbourne market is projected to deliver 8-12 per cent capital growth in 2021
The most important developments since our August report have been VIC's outstanding success in almost eliminating COVID-19 and consequently the significant unwinding of restrictions across VIC and the reopening of the VIC-NSW border. As previously projected, the second wave of COVID-19 has had a significant short-term impact on the market, but this is now fading.
The most affordable capital city houses in the country are enjoying ultra-low interest rates, improved economic conditions, and strong government incentives, paving the way for the long-awaited recovery of the property market
The Western Australian housing market experienced, prior to COVID-19, some improvement in buyer confidence along with signs of improvement in housing finance. The Perth market is now enjoying strong government support as a key driver of the improved economic conditions and renewed demand for housing.
Sometimes it seems crime does pay as houses in affected areas outperform
the market in Sydney and Melbourne.
Outlook
strong for houses on the Sunshine Coast as buyers hone in on lifestyle options,
ultra-low interest rates and the ability to work remotely.
Now
is the time to prepare to buy for prospective homebuyers in Melbourne, says
Pete Wargent, co-founder of BuyersBuyers.com.au, a national marketplace now
offering affordable buyer’s agency services to all Australians.
Adelaide-Central and Hills is the only area in Greater Adelaide where principal and interest loans for both owner-occupier and investor loan repayment amounts are higher than the annual rent.
For people who want to live in Perth and eventually their own home there, rent money is dead money and renters with secure jobs are better off buying a house than continue paying someone else's mortgage.
Southeast
Queensland renters are being urged to take advantage of the ultra-low interest
rates as paying a mortgage in most areas is cheaper than paying rent.
Ultra-low
interest rates have created a unique environment where buying a house in most
areas of Greater Melbourne is cheaper than paying rent on one.
Apart from one area, interest-only loan repayments for owner-occupiers
in Greater Sydney are higher than the annual rent, meaning now is the time to
buy if you are in a position to do so.
Buyers looking for the perfect property trifecta are placing their bets
on the Victorian port city of Geelong where lifestyle, accessibility to
employment hubs and affordable housing are the key to capital growth.
Having
already been hit hard by a major oversupply issue, the Brisbane unit market
continues to suffer thanks to COVID-19, leading to both equity and cash flow
risk.
When assessing the risk of over-building, a common and reasonably
sensible approach is to compare the number of properties in the pipeline to the
established housing stock for a suburb or sub-region, to get a feel for the potential
uplift in the dwelling stock.
Canberra has seen some very high auction clearance rates lately, and it’s one of the first questions I’m asked lately about the Canberra market. Yet this statistic isn’t one that I suggest buyers look at as the ‘be all and end all’ of measuring the market.
Investors buying rental apartments are taking an enormous gamble with not only equity and cashflow risk materially increasing, but also serviceability risks.
When you’ve found a property that you want to pursue, it’s often a stage where buyers come unstuck. The process of buying real estate can’t be too complicated, surely? Found a place, make an offer, right? The problem is, the sales agent and vendor are actively pursuing the highest possible sale price - and as the buyer, you’re after the opposite. Or at least you hope so.
Perhaps the best way to describe this is to compare the differences. Before you begin to consider what your time is worth, let's consider two different experiences...
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While the property market may look gloomy at this point of time,
certainly in Melbourne, it is expected to bottom in the first half of 2021 with
dwelling prices to rise relatively quickly thereafter.
Dual
occupancy dwellings might seem like an attractive proposition to investors, but
the reality is they are a high-risk gamble for both equity and cash flow.