- Expecting a property crash? There’s Buckley’s chance
- Looking to pick up a property on the cheap? You have missed the boat
- Think property will grow in 2021? You are probably right
- Are we looking at property bubble? That’s a bit of a stretch
None of us will forget 2020. And while it has been agony for most of us, it looks increasingly like it will be a springboard to growth in 2021.
The 3.3 per cent jump in GDP announced this week bodes well for the future – the combination of government money being pumped into the economy, plus the rollout of Covid vaccines means we enter 2021 with a spring in our step.
Astute property investors jumped into the market a few months ago. But, with NAB predicting further GDP growth of two per cent, others see opportunity in 2021.
This month, Corelogic announced 0.9 per cent growth in property across the country, with growth in every state’s market (including Melbourne). Corelogic predicted that Australian property would surpass its 2017 highs by around March 2021
Compounding this, demand for property has strengthened, with November clearance rates holding at about 70 per cent, well above the decade average of 61 per cent. Consistently strong clearance inevitably lead to price rises.
In Australia, interest rates remain a key driver of price growth – and rates will remain at record lows. Here, no change is envisioned for quite some time – something the Reserve Bank confirmed this week when, after the latest meeting of the Bank’s Board, it stated “the Board is not expecting to increase the cash rate for at least 3 years.”
But, are we looking at crazy property price growth? Probably not. With net immigration down from around 240,000 people per annum to an expected loss of 70,000 people, the volume of demand is simply not there to occupy properties at rates of the past.
2020 has been an unforgettable year – one that many of us probably never want to repeat. But we have come through it in much better shape than many of us anticipated nine months ago.
2021 is looking like a good year, with strong asset growth – especially property. But, before then, we wish you a Merry Christmas and Happy New Year.
Graeme Salt is a leader of The Futurus Group, whose brands primarily comprise Origin Finance, Chan & Naylor Finance as well as Walker & Miller Training. For a no obligations consultation on your borrowing needs, please contact him on 1300 30 67 67