Many people put off making a property move in 2020.
But 2021 is shaping up to be the perfect time to buy.
Despite the uncertainty of COVID-19, consumer confidence is at a 10-year high, and interest rates are at record lows, making borrowing money for a mortgage cheaper than it has been in recent memory.
But for all these positives for buyers, sales listings remained low in 2020. This led to pent up demand and strong competition, eventually driving up prices.
So where does this leave us at the start of 2021?
What are the property experts forecasting for 2021?
Eliza Owen, CoreLogic’s Head of Research Australia, has forecast a strong start to 2021.
“Overall, the housing market outlook for 2021 is positive, given highly accommodative monetary and fiscal policy, signs of an economic recovery and many first home buyer incentives remaining in place through to early next year,” she says.
In line with this, CoreLogic’s national home value index was up 0.9% for the month of January to a record high. In fact, it grew one per cent from pre-COVID levels, meaning Australian property prices are now higher than they’ve ever been.
A lot of experts believe this upward trend will continue. SQM Research’s The Housing Boom and Bust Report 2021 expects Sydney property values to rise by between seven and 11 percent during 2021. Alan Oster, NAB’s group chief economist, believes Sydney’s house prices will grow 4.4% over the year. Meanwhile, ANZ Bank also forecasts Sydney prices will increase by 8.8% and Westpac forecasts a rise of 14% between 2021 and 2023.
These price rise predictions could sway buyers to act sooner, rather than later, to take advantage of any capital growth over the next year.
What happened to the inner city property market in January 2021?
Our own figures for January 2021 tell an interesting story and are broadly in line with the data. 2021 got off to a good start and we expect price gains during 2021 based on the market activity we’re seeing right now.
Over the first month of 2021, we completed 10 sales. Six properties sold by auction and there were four private treaty sales.
We met 1,438 prospective buyers during the month, which suggests there is strong competition in the market, as well as a wide variety of people looking for a home or investment property. We also issued 113 contracts and answered 1,566 web enquiries.
These numbers were significantly higher than we’d expect to see in a typical January. More importantly, auction season hadn’t even really kicked off in full yet - that happens later in February and March.
Our average sale price for apartments was $945,000 and our average house sale price was $1,797,000 - both higher than the Alexandria and Erskineville medians we reported on just one month ago in our December 2020 market report.
What buyers and homeowners should know about 2021?
While prices are rising, first home buyers may find this a very good year to get into the property market, given the range of grants and schemes available to them. These often make it both cheaper to buy, as well as easier to get the deposit needed for a home loan.
Renovators should be aware of the $20,000 HomeBuilder stimulus grant, which has been extended to 31 March 2021.
And, as we noted in November 2020, this year could be a game-changer for the Sydney property market, with the State Government considering replacing upfront stamp duty on property transactions. After all, stamp duty is the biggest upfront cost most home buyers face and it can act as a real impediment to buying a new home.
One trend that has grown during the pandemic and is likely to continue in 2021 is the increased popularity of off-market sales. This means that if you’re looking to buy, you should be aware that not all properties will be advertised publicly. Buyers really need to establish a relationship with real estate agents to see every property that hits the market. Contact us if you’d like to register for our database of interested buyers.
And, in a competitive market like the current one, it’s important to be ready to act decisively when you do find a property you’re interested in. This means doing your research on market prices, but also having your finance ready. Speaking to a mortgage broker or lender can be a good starting point.
Based on the great start to 2021 we’ve seen in the inner city and inner west, we’re feeling very confident about the year ahead and are happy to help you with your property plans.