The Australian property market has been positively buzzing for the past few months, and has shown itself to be remarkably hardy and adaptable in light of the challenges posed by the outbreak of the COVID-19 pandemic. The market is booming, and this can probably be ascribed to a number of factors allowing interested homebuyers to still acquire property, even if the prices of homes have also been steadily increasing. Among others, the Australian government’s relief measures, including mortgage payment holidays and a moratorium on evictions, set to end on 11 September 2021, have all contributed to favourable property market conditions.
Australia’s Housing Market
The current local real estate market has seen property prices rise despite the outbreak of the pandemic, and this has been due to a number of factors, chiefly the basic economic principle of supply and demand. Homebuyers have been able to invest in property, thanks to relief measures and existing government programmes like the first homeowner grant. With interest rates at historically low levels, many buyers were also in the position to buy a property for the first time.
Because the economic fallout of the pandemic has not been as severe as initially expected, many prospective homebuyers have also been able to retain their jobs, while remote work has allowed them to save on commuting costs and the like, and use this money towards a deposit on a new property. Demand has also been driven up by the pandemic, as people who work from home started looking for other, larger properties that better suited their new lifestyle.
There is no doubt, then, that the demand for new properties has outweighed the available supply in many areas, creating the breeding ground for higher home prices. Despite the rise in the price of property – June 2021 saw the fastest annual growth in the price of homes since April 2004, with all of Australia’s capital cities recording a rise in prices, too – buyers have still been vying for an ever-smaller pool of properties.
Economists have adjusted their price forecasts to account for increases, but many experts now believe that this trend cannot continue indefinitely. As the price of homes rise, many buyers will start being priced out of the market and unable to afford properties, despite a range of factors that make it easier to acquire a home than it has been in many years.
In summary, the current Australian property market is one that favours sellers, as they stand to make greater profits than they likely would have two years ago, even if the COVID-19 pandemic has put markets under pressure. The resilience of the Australian property market has been evident, and has again shown the expertise of real estate agents, who have been able to weather the storm by adjusting the way they advertise and present properties to potential buyers. Government relief efforts and low interest rates have made it easier for buyers to purchase properties, but as homes become more expensive, many may find themselves unable to acquire new homes later on.
What Factors are Driving up Home Prices?
As mentioned earlier in this article, there have been a number of factors driving up the price of property in Australia. Firstly, a drop in interest rates have allowed prospective homebuyers, who may not have been able to purchase a home earlier, to look into purchasing a property. Working from home has also given many buyers the opportunity to save money to use as a deposit on a new home. Government’s efforts to put in place relief measures that take the pressure off have also hugely influenced the amount of buyers in the market.
This has created unexpected demand in the property market – demand, in fact, which started to exceed the supply of homes available on the market. Because of things like a moratorium on evictions, homeowners have not been forced to put their homes on the market because they weren’t able to pay their mortgage, further impeding the supply of homes on the market.
These conditions have all led to a steady rise in the price of homes during the pandemic, with especially large growth over the past few months. Sellers stand to benefit from this, as the profits they may make once their property is sold will almost surely be more than it would have been just a few months ago.
Is It Better to Be a Buyer or a Seller?
While the current market certainly benefits home sellers in terms of the profit they can make, this is not to say that buyers aren’t also in a favourable position, too. Real estate agents always reiterate that the property market is notoriously unpredictable, and current market conditions are an excellent example of this. While many real estate experts expected the markets to reel from the economic consequences of the COVID-19 pandemic, the Australian real estate sphere has stood strong, and has been driven by other measures that are only in place because of the outbreak of the pandemic.
For sellers, this has led to an increase in home prices, potentially letting them get a huge return on investment when their home is sold. Buyers, on the other hand, have been able to benefit from relief measures and the ability to save, while prospective buyers who have never purchased a property before, are also able to access other grants. With this being said, home prices are expected to continue to rise for a while, albeit not in perpetuity.
Is it better to be a buyer or a seller, then? This depends on what buyers and sellers are looking for. A good real estate agent will always be able to advise clients about the right time to buy or sell a property, based on their specific circumstances. For example, while sellers might want to strike the iron while it’s hot and get their home on the market, this may not be the right time for them to do it if they won’t be able to afford another home. Similarly, buyers may be interested in acquiring a new home, but higher property prices may be limiting their options.
Whether you’re planning on buying or selling, a qualified and experienced real estate agent is essential. An agent that understands the market they operate in will be able to advise buyers on properties that suit their budget, taking into account all the measures available to them, while sellers will gain from having access to a large database of potential buyers when they use an agent to help them sell.
Strike Now, While the Market is Hot
If you are planning on selling your home, a hot market can mean extraordinary profits when your property is sold. Of course, high demand from buyers should also be a heartening factor on any selling journey.
Speak to a real estate agent that knows the tides of their local property market. Real estate agents who have been in the business for a long time have a good understanding of how the markets perform, and have been keeping an eye on the way the real estate sector has reacted to the pandemic.
For sellers that have a home that stands out among other properties on the market, a quick sale with a good profit in tow may just be on the cards!
Preparing your Home for Sale
Even if market conditions make it a good time to consider selling, homeowners should not neglect getting their home ready for the market.
Real estate agents will always recommend renovations and improvements, should any be required, which will add value to the property and make it appealing to the largest potential group of buyers.
After conducting a comparative market analysis on the property, taking into account the home’s features and amenities, as well as the way it compares to other, similar properties in the same city or suburb, an agent will recommend improvements to the home that will catch the eye of potential buyers.
Staging the home correctly is important in this regard, as is making sure the online listing shines. Buyers may be salivating after the limited number of homes that are available, but will still keenly inspect every part of the property to make sure that they are not purchasing a house that will cost them money down the line – especially if they are spending more money on the home to begin with.
The Australian property market has done well, despite the challenges brought about by the pandemic. The market has shown movement throughout, and buyers have been keen to get their hands on new homes. A limited supply of properties has driven the price of houses up, creating circumstances in which sellers stand to make very good profits.
These conditions will not continue forever, though, and prospective home sellers will want to take advantage of the hot market.
A good real estate agent can assist buyers and sellers by providing valuable advice and helping their clients to understand the ebb and flow of the property market. Are you still looking for an agent to help you buy or sell a home? Perfect Agent recommends agents that understand your exact needs.