2021 was a truly unusual year.
After 2020, a year fraught with the effects of the global COVID-19 pandemic that wreaked havoc on world markets, forcing families into their homes with lockdowns and businesses to shutter their doors, 2021 saw the advent of safe & effective vaccines and despite the lockdowns experienced in our Southeastern states, 2021 was an amazing year for anyone involved in property.
For many people, their home or investment properties earned more than they did as property values reached new highs and real estate records were broken.
2021 has rewritten the property record books.
From property price growth to interest rates, to new home buyers, to refinancing – no matter which way you look records are being broken.
To discuss these and which new records we think will be set in 2022 I’m joined by my business partner Brett Warren - national director of the Metropole Properties.
One of the records that must have been broken is the extraordinarily strong market appetite for property, but let’s dig into a few more records that have been shattered.
- Prices rose at the fastest pace in more than three decades
- In 2021 we experienced a property boom, the strength of which no one envisaged at the beginning of the year.
- The level of price growth has been the fastest in more than 3 decades, but in real terms, it’s the 3rd fastest in a century.
- However, not all property markets will continue growing strongly moving forward.
- We’re in for a 2-tier property market moving forward.
- Properties located in the inner and middle-ring suburbs, particularly in gentrifying locations, will outperform cheaper properties in the outer suburbs.
- Australians became wealthier than ever before
- Australian households just keep getting wealthier.
- A combination of surging property prices and solid share market gains saw total Aussie household wealth grow 4.4% or $590 billion in the September quarter.
- Wealth is up 20.2% on a year ago – the strongest annual gain in 11 1/2 years.
- And the number of Australian millionaires is expected to grow to 3,100,000 by 2025.
- Mortgage rates hit historic lows
- In 2021 low-interest rates and the easy availability of finance spurred record demand for property pushing prices higher Australia-wide.
- New lending and refinancing also hit an all-time high – I guess that’s another record that was set.
- A record number of new listings of properties for sale
- The number of properties listed for sale on realestate.com.au hit a historic low in June 2021.
- However, as lockdowns lifted and restrictions eased, new listings of property sales come to 22.8% in the last three months of the year.
- This is made for a robust spring selling season with new listings finishing 19.2% higher than the five-year average.
- Demand for housing hit record highs
- 2021 was a year that many Australian families upgraded their homes while a record number of Aussies became first home buyers.
- The combination of low-interest rates, the impetus from shifting lifestyle preferences, an influx of ex-pats, low supply of properties for sale, forced savings, and government support measures have all fuelled Australia’s insatiable appetite for property to historic highs for much of this year.
- Properties are sold at record speed across the country.
- With multiple buyers keen to purchase the limited number of good properties for sale, many were forced to make quick decisions and, in some cases, pay a premium to purchase their property.
- As for the records broken - in November, the median number of days a property was listed on realestate.com.au before it was sold was 30 days, a historic low.
- Property sales volumes soared
- An estimated 614,635 properties changed hands in the past 12 months, the highest level in almost 18 years.
- In fact, in November property transactions were 32.6% above the decade annual average.
- Rentals finally rose
- After several years of slow rental growth, in the year to November Australian rent for using Chris 9.4% which was the strongest and you will appreciate any rent since January 2008.
- Capital cities experienced a net loss of people
- Australia’s closed borders put a halt to immigration in 2021, but tight borders didn’t stop Aussies from moving house.
- In the March quarter of 2021, data from the ABS showed our capital cities recorded a net loss of 11,800 people.
- This is more than double the decade average and the largest quarterly loss on record.
- This was prior to the arrival of the delta variant.
- Demand for luxury property soared and the $3 million club has doubled
- While the value of most properties increased in 2021 the year finished with the luxury end of the market outperforming.
- Australia’s $3 million suburb club doubled again in 2021.
- Demand for regional property soared, fuelling record-breaking price growth
- One of the side effects of the pandemic and the resultant lockdowns was that both net regional and interstate migration trending above long-run averages
- This resulted in 2021 being the year when combined regional housing markets have outperformed, combined capital cities in terms of price growth.
- And as the year ended this trend has reversed with our capital cities outperforming.
Links and Resources:
Some of our favorite quotes from the show:
“It was just too easy to let FOMO get in and make silly decisions, cut corners, and not do your due diligence.” – Michael Yardney
“Almost anyone could look good last year because if you bought in the wrong location, it still went up 10%, and you thought hey, look how smart I am!” – Michael Yardney
“Life is worthwhile if you try. It doesn’t mean you can do everything, but there are a lot of things you can do if you try.” – Michael Yardney
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