Australian property prices will go up this year – but not everywhere. And not all the time!
Sometimes one part of the market will be up while another will be down. Others will tread water.
Property buyers will have to learn how diffent parts of the market are operating at anyone time – just as they have had to learn what Covid means and how to live with it.
Coronavirus had a huge impact on the property market in 2020 and as it is still with us, it will impact us in 2021. But, with the pandemic more powerful in some locations than others, property markets will run at different speeds.
For many existing investors, 2020 was a bad year – Inner city apartment rents in Melbourne and Sydney fell sharply – by 7.6 per cent and 5.7 per cent, respectively – as the flow of tourists and students ran dry and renters opted for the leafy suburbs and regions.
|2021 Growth Predictions|
|UBS||5-10 per cent|
|Westpac||7.5 per cent|
|HSBC||2-6 per cent|
|SQM||5-9 per cent|
But the nation’s rental markets have diverged in response to the pandemic disruption through 2020.
House rents were up 3.3 per cent collectively across the combined capital city markets over the year, while apartment rents fell 4.6 per cent, according to CoreLogic figures.
And until we have herd immunity and/or widespread distribution of the vaccine, there is a risk of Covid hotspots seriously clamping down on any market segment for a period.
Even sharper was the contrast between city and country: rents for regional houses and units ended the year 5.5 per cent and 4.5 per cent higher as the tree-change trend gathered steam through the lockdowns and disruption.
Many major employers have accepted that the world will never be the same again – we have learnt to work remotely. Yet, bit-by-bit, there is a push for some employees to come back to the office. Slowly, and I mean slowly, we will see city centre property markets come to life – especially when we open our international borders to students and immigrants. But don’t hold your breath
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 Graeme on 1300 30 67 67