Here’s why property buyer demand will continue this year

By:

Our property markets ended the year strongly, with buyer demand pushing prices up almost everywhere as home buyers respond to lower borrowing costs and repayment buffers, plus grants, incentives and stamp duty waivers.

Not only are these easier and cheaper borrowing conditions encouraging more buyers to enter the market, but they also give buyers more borrowing power.

The charge is being led by first home buyers, which is why the price growth has been highest in the cheapest capital cities, where more homes are priced within their reach.

As the following graph shows, the percentage change in prices for the last quarter of 2020 was greatest in lower priced cities and lowest where median prices were highest.

The one notable exception was Canberra, whose property market continues to outperform the State capital cities as we publicly predicted in the property media earlier this year.

When will this demand slow down?

When prices once again become unaffordable for first home buyers, will demand slow down?

The answer is that the growth in lower priced areas will encourage existing home owners to use their increased equity and the availability of cheaper finance to upgrade to better homes in more suitable areas.

This means that demand will ripple to those areas, putting pressure on prices to increase there as well.

Once prices have reached the higher borrowing capacity of upgrading buyers, the market will slow down again, but in short, we have nothing to fear from the future performance of our property markets and everything to hope for.

 

icon-podcast-large

Subscribe & don’t miss a single episode of Michael Yardney’s podcast

Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.

Need help listening to Michael Yardney’s podcast from your phone or tablet?

We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.

icon-email-large

Prefer to subscribe via email?

Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.


About

John Lindeman has well over a decade of experience researching the nature and dynamics of various types of assets at major data analysts and is a leading property market researcher, author and commentator. For more information visit Lindeman Reports.


'Here’s why property buyer demand will continue this year' have no comments

Be the first to comment this post!

Would you like to share your thoughts?

Your email address will not be published.
CAPTCHA Image

*


Copyright © Michael Yardney’s Property Investment Update Important Information
Content Marketing by GridConcepts