Australian Property Value Snapshot March 2021
The Australian property market is continuing to be a roller coaster ride in 2021. The fear that Covid-19 initially caused in the property market in April and May of 2020 seems to have been well and truly overcome by the stimulus packages, incentives and the number of people returning to Australia.
Even with the lack of international students, property is HOT right across Australia. The Australian property market has been quite a mixed bag over the past couple of years. Melbourne has been growing whilst Perth has been struggling.
‘Australian home values surged 2.1% higher in February; the largest month-on-month change in CoreLogic’s national home value index since August 2003.’ (CoreLocic Blog 1st March 2021.)
Supply, demand and confidence:
The number of properties on the market across Australia is very low. Demand for housing is high and the confidence seems to have returned to property buyers.
The total number of listings across Australia in February of 2021 is 140,000. That is 100,000 fewer than the same time in 2016, 80,000 fewer than March 2019 and 60,000 fewer than in March 2020.
Here are just a couple of examples just how low the supply of residential properties really is:
In Perth on Saturday the 27th of February 2021 Perth had only 7905 properties listed for sale. That is a 38% decrease on the same time last year. And a massive 54% decrease in listings from February 2019! Sale listings are at a 13 year low in Western Australia.
In Sydney as of March 2021 there is just 18,161 properties on the market, which is a 12.5% drop over the past 12 months.
It’s not all about the capital cities either…
The combined regional growth across Australia over the past 12 months was 9.4% The option of working for home, and the desire to be outside of the highly populated cities is driving growth across regional Australia.
Western Australia is the only exception to this rule with a 12 month regional growth rate of negative 1.5%, however the past three months has seen growth of 4.3%, so the yearly negative result is probably just a reflection of what was happening pre Covid.
Saying all of that, property prices in some capital cities are still lower than at their peaks in the last few years.
Sydney is still down 1.1% from the peak in 2017. Melbourne is 1.7% down from its record high in March 2020 (Domain Blog 1st March 2020) Perth’s median house price is currently sitting at $491,800 which is still well below its peak median price of $551,000 in December 2014.
So who is buying, and why?
During the initial wave of Covid in April and May of 2020 investors were few and far between, in-fact investors requesting finance reached a 20 year low in 2020 according to the Australian Bureau of Statistics. As the recovery began in late 2020 most property purchases were by owner occupiers: ‘The Australian Bureau of Statistics Lending Indicators revealed owner occupier loans were up 10.9 per cent over January, and a massive 52.3 per cent over the year.’ (Domain.com.au blog 1st March 2021)
BUT as we start 2021 investors are returning to the market. The lack of properties for sale on the market, the incredibly low rental vacancies and the end of the rental freeze in late March 2021 is seeing a spark in the interest of investors.
As professional property valuers we keep a close eye on what is happening in the property markets across the country. There will always be hot spots and areas where property prices are bucking the trend (both in a positive and negative way). Statistics are great for an overall snapshot and looking at trends, but nothing beats the expert knowledge of our team of local valuers who have their feet on the ground and know exactly what is happening in your unique location.
For an expert property valuation please call our team on 1800 828 222