Australia’s property market has shown remarkable resilience in the face of the COVID-19 outbreak. This can likely be attributed to things like relative economic stability thanks to government measures to help the average Joe weather the storm. Mortgage payment holidays have prevented homeowners from being forced to put their property on the market, leading to supply and demand discrepancies which started driving up home prices, especially in Australia’s capital cities. Even as prices started rising, demand for new property remained high as record-low interest rates gave consumers a chance to purchase homes, and work-from-home living allowed them to save more money to put a deposit down on a new property.
The momentum the Australian property market is experiencing in 2021 was ignited in 2020, with the property market remaining strong throughout the initial onset of the pandemic. Real estate agents employed such tools as online tours and home inspections, which still allowed prospective buyers to get a feel for properties, while adhering to lockdown regulations to curb the spread of the virus. It is a testament to the agility and adaptability of real estate professionals that this industry was able to continue its business even as the pandemic put a lot of strain on many other businesses. As it currently stands, though, the Australian economy is stronger than it was before COVID-19, with the world of real estate contributing to this rapid and perhaps unexpected growth.
In June this year, the Australian property market recorded its fastest annual growth since April 2004, according to data released by CoreLogic. Capital cities all recorded growth, with Tasmania’s capital city Hobart showing monthly growth of a whopping 3%. The chief economist at AMP Capital, Shane Oliver, told The New Daily that the recent price surge led him to upgrade his price growth forecast for 2021 to 20% from his initial 18% prediction.
With that being said, the price of property cannot continuously keep climbing, or many buyers will start being priced out of the market and left unable to purchase a home after all, despite circumstances being ideal for buyers, too.
Home Prices in Australia
COVID-19 influenced the price of homes in a very genuine and tangible way, and also had a prominent influence on the supply and demand of properties since the pandemic started. Limited construction during the pandemic has meant that there have been fewer properties available on the market than there would have been, had the pandemic never occurred. Along with a soar in the price of timber, supply of new properties remains constrained, further leading to an overall rise in the price of property.
What consumers are looking for has also certainly been influenced by the pandemic. In the era of remote work, one’s dwelling should be a place that is suited to working from home. For many homebuyers, this translated to upgrading their property to something more spacious. This, again, led to an uptick in demand for property across the board.
As basic economic principles dictate, a lack of supply to service the growing demand for property has driven up the price of homes, leading to unprecedented growth rates, not seen in almost 20 years.
Now, experts are forecasting that this soar in prices is unsustainable, as it will lead to property simply becoming unaffordable for many people. Even if homebuyers have access to government grants and can take advantage of low mortgage rates, these measures will not be able to serve buyers if the homes on the market become too expensive for them to buy. While demand is strong, Australia’s capital city, Canberra, has seen a rise in house prices amounting to 30% in total. It’s easy to see why this trend cannot continue in perpetuity.
Home Pricing Trends
It would seem the pandemic has complicated forecasting trends in the property market. Earlier this year, ratings agency Fitch adapted its estimated growth forecast estimate to 16% – this is a far cry from the agency’s earlier estimates, released in December 2020, which predicted growth of between 3% and 5%.
It is fair to say that the trend in the Australian property market since the onset of the pandemic has been a rise in the prices of available property. Demand has been exceptionally high, driven by economic relief efforts by the Australian government, very low interest rates, existing measures like the first homeowner’s grant, relative economic stability thanks to remote work, and consumers’ ability to save money for a deposit. A lack of available properties to satiate the appetites of buyers further helped to drive up prices, as the construction of new properties has been stunted by the pandemic.
Says CoreLogic’s Head of Research, Tim Lawless, “Buyer demand is most likely being fuelled by a surge in owner-occupiers rather than investors, looking to take advantage of historically low interest rates, generous government incentives and an increased state of normality.”
To call this a housing boom is an understatement, but there is no doubt that the rise in prices is also driven by homebuyers’ fear of missing out. As this trend continues, the capital cities look set to become ever more unaffordable. Already Sydney, Melbourne, Brisbane and Adelaide are among the top-10 most expensive cities in the world to buy a home in.
How to Sell Your Home Quickly While the Market is Hot
High buyer demand is always a good sign for homeowners who may have been considering putting their property on the market. It is far easier to decide to sell when sellers are sure there is a market – and this sentiment is even sweeter when they stand to make a better profit on the sale of their home than they would have two years ago.
The real estate agent helping sellers to get their property noticed will likely advise sellers to strike while the iron is hot and take advantage of positive consumer sentiment.
Before putting their homes on the market, though, sellers should keep in mind that theirs is still competing with other properties, albeit fewer than there might be otherwise. For this reason, presenting the home to buyers in a pristine state remains of the essence. In this regard, sellers should pay particular attention to how their online listing looks.
The services of a professional home stager may significantly help to put the property in its best light, and taking care to undertake all repairs and renovations to the property even before the home is staged is very important. Real estate agents will point out parts of the property that are in dire need of some attention, and may even know of a reputable and skilled tradesman to complete the work. Sellers should take heed of this advice, as real estate agents know what discerning buyers in the city or suburb are looking for.
Once the home has been upgraded, it is ready to be listed online, where interested buyers can start perusing all its features before coming to view the property in person. Real estate agents handle the process from here, and will negotiate with buyers and set up the sale.
A hot market may signal the exact time to sell your home, but you should never attempt to do so without the expertise of an experienced and qualified real estate agent. Finding an agent that knows their stuff isn’t as difficult as it may seem – and using an online agent finder like Perfect Agent makes the process even easier.
Find the Perfect Real Estate Agent
Finding the perfect real estate agent will mean that sellers have to speak to a few agents beforehand. Interviewing potential candidates lets sellers interact with real estate agents to get a feel for their personality, while also giving them the opportunity to assess an agent’s skill, qualifications and track record.
Perfect Agent offers sellers the chance to gain access to a number of qualified and experienced real estate agents in their city or suburb. Available all across Australia, Perfect Agent recommends agents based on the specifications set out by sellers. This means that sellers will get recommendations that suit their exact needs.
Once sellers have found their perfect match and have agreed on the commission that the agent will receive in compensation for their services, the home-selling process can begin in all earnest. With the right agent, in the right economic climate and circumstances that favour sellers, sellers are sure to reap a handsome return once their home is sold.
Home prices in Australia have been on a very good run thus far. There has been extraordinary growth in house prices over the past few months, with prices now at rates that haven’t been seen in almost two decades.
This makes it an ideal time for home sellers to take advantage of the hot market and get their property sold amid a flurry of interest from a host of buyers. While demand is high, sellers may well make a very good profit on the sale of their home.
In times like these, a skilled real estate agent is your best partner. Still looking for an agent to help you sell? Contact Perfect Agent today.