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After a tumultuous year, property experts concur that the year ahead will see a housing market on the up.
They also predict that demand for lifestyle locations won’t slow down, and it’s unlikely to return to a buyer’s market any time soon.
The competition will be fierce for what stock is listed according to Ben Kingsley, Chairman of Property Investors Council of Australia with investors set to return to carefully selected markets.
“If we are able to keep the virus contained, then 2021 looks very promising for property, especially on the back of record-low interest rates and positive sentiment in the market,” said Ben.
Property markets across the nation are shaping up for a stellar 2021 according to Peter Koulizos, Chairman of Property Investment Professionals of Australia.
“This year (2020) has been extraordinary, but 2021 promises to be a more normal year, especially with a number of COVID-19 vaccines being rolled out.
“In relation to the residential property market, 2021 will be a better year than 2020. According to CoreLogic, major capital city annual property prices in 2020 ranged from -1% in Melbourne to +6% in Adelaide. In 2021, we should see increases in all capital cities at a higher rate than we experienced in 2020.
“Commercial property, especially office property, will take a hit in 2021 and beyond. With more people working from home for at least part of the working week, there won’t be as much need for office space, especially in the CBD.”
“The two most important sectors to keep an eye on for 2021 are CBD apartments and property in lifestyle towns,” said Peter.
“A large proportion of CBD apartments are owned by overseas investors and lived in by international students. Due to COVID-19 restricting the numbers of overseas students, demand for CBD apartments will decrease, as will their price and rents.
“Lifestyle towns within commuting distance from our major capital cities should benefit in 2021 and beyond as a consequence of COVID-19. If you don’t have to go to work every day and you are allowed to work from home, then home doesn’t need to be as close to work as it used to be.”
Fringe and lifestyle residential markets are seeing significant market activity and strong price growth according to Kevin Brogan from Herron Todd White.
“Historically low-interest rates and pent-up transactional energy in residential markets are likely to continue to provide a lift to the market in the early part of 2021.
“Demand for regional and lifestyle markets is likely to remain strong. However, other factors will exert a downward influence as government stimulus measures come to an end.
“In particular, the HomeBuilder grant has brought forward demand for new home construction that is likely to cause a demand vacuum in the second half of the year,” said Kevin.
More affordable property and locations set to shine next year, according to Mike Mortlock, Managing Director of MCG Quantity Surveyors.
“People re-evaluated what’s important to them, which led to an increase in real estate platform searches as people considered this, including a desire to put in place a hybrid working from home and office model.
“This will make the city fringes more attractive as the commute time becomes less important and homeowners will see their money go a bit further.
“Many investors seized the opportunity that the pandemic provided. There certainly was a period where we didn’t know how bad things could get, but once some certainty and stability arrived, there were some very short-term windows of opportunity.
“With the market staying tight through a lack of stock, prices have risen in many places past pre-pandemic levels, which will likely add to the urgency of buyers, and lead vendors to list as they’re no longer worried about selling at the bottom of the market.”
Ruth Lewis, Border Chronicle, 12 January 2021