Property update – December 2020
Record savings will direct more buyers to property in 2021. It’s anticipated that Australians have saved over $100 billion in 2020. This is a record we haven’t seen before. Covid-19 certainly interrupted our livelihood and social life, but many Australians were forced to cash up their savings as apposed to shopping or travelling.
Property prices have remained steady throughout 2020 as many home owners were offered financial support from both banks and government to keep their home. During the second home isolation in Melbourne, the fact auctions and property inspections were replaced with virtual online, many refrained from buying and selling. The lowered activity in buying/selling has provided Melbourne’s property market to remain stable. Many economists including ourselves at Crest Property Investments anticipate an increase to buying activity in 2021.
The increased buying activity will likely outweigh the property supply in Melbourne. This will place upward pressures on property prices. This means home owners may see their property values go up! On the flipside, the growing concern to property affordability may continue to worsen. Gaining financial support from family has never been more important. If you are a parent wanting to help your children buy their first property, we have shared some great ideas that may help you in this situation. Please click here to learn more.
During the last quarter of 2020, we witnessed an influx of first home buyers purchasing. They have been taking advantage of the various government grants including the First Home Owners Grant, Government Mortgage Guarantee Scheme and HomeBuilder Scheme Package.
First home buyers have also played a large contribution in keeping property prices steady. According to CoreLogic Australia, Melbourne property prices for the month of November 2020 saw home values record their first month on month rise since March 2020.
In fact, prices in the lower brackets have been increasing faster than those at the middle brackets, and in some locations climbing double of what can be seen in Melbourne. This indicates first home buyers will have a tougher time getting into the market.
Lending activity is also very high while credit card debt is at a long term low. This will increase the opportunity for more buyers to get into the market in 2021.
As buyer’s advocates we have seen a two tier property market. The apartment buildings in Melbourne CBD (city), Southbank and Docklands are all seeing high levels of vacancy. This is in double digits and well above Melbourne’s average. Most of these property owners are foreign investors. It is difficult to know what may happen next, but we feel it may cause a sell-off. These postcodes may expect property prices to fall. Apartments outside the first 2kms of the city are not expected to follow this trend. There are some great opportunities in apartments, but obtaining advice is key.
Property Update
The year 2020 has been a difficult year, however it’s a relief for home owners to see property prices holding up nicely. The year 2021 will not be as positive for all investment markets or small business, but if you are in a position to purchase an investment property, now is a very good time to start thinking about it. Interest rates are at a historical low, with a very low expectation of increasing anytime soon. As buyer’s advocates we research the property market on a daily basis. With our experience and passion to understand your situation, we are always here to help. Please don’t hesitate to contact us if you’d like to explore the next steps to buying.
While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more, please contact us. We welcome the opportunity to assist you.
December 2020
