According to those in the know, Australian house prices are unsurprisingly set to rise in the not so distant future – but how do you capitalise on it in time?
While we can now refer to 2020 as many things, “surprising” is a term that springs to mind if referring to the Australian property market. With rising unemployment (or underemployment), a reduction in consumer spending and a shaky economy, it’s understandable as to why buyers may not have the same confidence as they once had.
However, the arrival of COVID-19 has appeared to be more of a temporary pause as opposed to the cataclysmic hit that was initially predicted. Although it’s changing how and where we live, 2020 saw Australians pocket an unprecedented $110 billion in personal savings. Thanks to cashed up Aussies with pre-approvals and sizable deposits, Australian house prices have remained steady as the market stood strong while the rest of the economy took a battering – but how long will it last?
A Boom Is On The Way
Mr Gareth Aird is the Commonwealth Bank’s Head Of Australian Economics, and he believes that we are sitting on the edge of a housing boom – so much so, that he’s anticipating Australian house prices to surge past 16% within the next two years.
“The negative impact that COVID-19 had on Australian property prices turned out to be much more muted than almost any forecaster expected, us included. However, we were earlier than most to recognise this and revised our call in September 2020, in order to look for a smaller peak-to-trough fall and a decent lift in prices over 2021.”
Within the next two years, the median house price in Australia is expected to hit $1.2 million. While that doesn’t mean that this level of growth is expected at the same increments all around Australia, projected forecasts for each capital city can be split up into the following:
Melbourne – Increase of $110, 000 on average, 12% growth within two years.
Sydney – Increase of $160, 000 on average, 12% growth within two years.
Brisbane – Increase of $102, 000 on average, 16.6% growth within two years.
Perth – Increase of $99, 000 on average, 17.7% growth within two years.
Adelaide – Increase of $86, 000 on average, 14.5% growth within two years.
Darwin – Increase of $99, 000 on average, 18% growth within two years.
Hobart – Increase of $87, 000 on average, 15% growth within two years.
With the median growth percentage reaching 14.4% when combining the projections for Australia’s capital cities, Mr Aird predicts that the only thing that could potentially slow the market down is a significant Covid-19 outbreak on Australian shores.
“The Australian housing market is on the cusp of a boom. The boom is being driven by record low mortgage rates coupled with a v-shaped recovery in the labour market,” Aird said.
Staying On Top Of Australian House Prices
Ignoring all of the variables, there is one crucial factor to consider if you’re thinking about buying any form of property in any form – it’s a long game.
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