With interest rates near zero, Australia’s economy rebounding, and pumped with massive amounts of stimulus, and the coronavirus all but eradicated from our shores, our property markets are looking healthy and starting the year off on a strong footing.
The stats show that after the nation went into lockdown last year, national property rates fell overall a cumulative 2.2 percent.
And of course this was led by Melbourne and Sydney that were most affected by the lockdowns.
But of course this was nothing like the predicted calamitous falls.
Now on the back of continuing increase in confidence, strong growth low mortgage rates, and the emergence of a vaccine plan, many are projecting house price growth in 2021.
In fact, many are projecting double digit growth this year.
Are they right?
That’s what I discuss with Dr. Andrew Wilson, along with lessons from last year and housing market forecasts for 2021.
Then, as always, I’ll share my mindset message with you.
Lessons learned from 2020:
- It was really the physical restraints to property transactions that impacted the market, rather than a change to our supply and demand. In other words, the property market fundamentals were and are strong
- Be really careful whose forecasts you listen to. Property investors who listened to catastrophic predictions missed out on good opportunities
- There isn’t just one Australian property market. Markets are segmented by geographic locations as well as by factors like the type of dwelling and the price.
- Property investment is really a game of finance with some houses thrown in the middle
What’s occurring now:
- The unemployment rate is falling
- The economy is recovering well due to falling unemployment and even new jobs
- There’s been a huge surge in housing loan approvals – 24.4% above pre-pandemic levels
- Consumer optimism is trending upward
- First-time home buyers are in the mix
- There is a lower number of listings in the market than usual
- The fiscal cliff is not a real cliff, more like a step
- However, the rental market still has some challenges
Some of our favourite quotes from the show:
“You know what they say about opinions – there’s like bellybuttons, everyone’s got one, but they’re not very useful.” – Michael Yardney
“The property market moves in a cycle and after every boom, there’s a downturn or a slump phase, and then it actually starts to pick up again slowly, then eventually another boom occurs.” – Michael Yardney
“It may sound like a cliché, but maybe it’s time to play more and work less.” – Michael Yardney
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