Buying Property In 2021: Is It A Good Idea?
Depending on your circumstances, the thought of buying property in 2021 will either fill you with excitement or existential dread – so what do you need to know?
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. Cashed up with pre-approvals and sizable deposits, our real estate market is expected to hit double digits in terms of growth patterns for 2021.
Should You Be Buying Property In 2021?
The strength of the Sunshine State’s property market has seen a rise in demand for detached homes, especially those in regions that compliment our lifestyle by the beach or easily accessible to the city. The end of 2020 saw a +4.14% growth in Brisbane’s home value index, with capital growth projected to surge as high as 6-10% – so for Queensland, it hasn’t been all doom and gloom after all.
While whispers circulate that 2021 will indeed be a buyers market, as usual it often boils down to your personal circumstances. In saying that, are there any generalised factors that may influence your decision to purchase a house – or not – this year?
Lower Borrowing Costs – With interest rates sitting at record lows around the world, it’s worth considering that this won’t last forever. Buyers are being enticed by the big banks to return to the market, so be sure that you shop around with a potential loan package.
Predicted Housing Shortage – For rentals outside of the CBD in particular, demand has soared, even despite a significantly lower level of migration than usual. With both buyers and renters competing for the same properties within their budget, this is driving up prices.
Less New Builds – The construction sector is one of Australia’s most dominant industries, but even it hasn’t been immune to the economic fallout that came with the arrival of Covid-19. Even despite government incentives, new residential builds are down 17% when compared to 2019.
Prices Are Rising – Although house prices were predicted to fall by as much as 20%, the market has proven to be more resilient than experts initially forecasted. As more Aussies start working remotely and appreciate their space, demand is surging for the outer suburbs.
Investors Are Returning – Along with many other grants, the Federal Government’s HomeBuilder scheme has predominantly attracted property investors in the hopes of kickstarting the construction industry back to where it once was.
Is Buying Property In 2021 Right For You?
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.
When you sit down to weigh up the pro’s and con’s of buying property in 2021, think in ten to twenty year allocations – not shorter one to two year terms. Having a long term plan and foresight is important. Will you have the same requirements or needs in a decade, as you do now? While a Brisbane CBD view and close access to the local nightlife scene might be a priority for you at 28, have you considered the schooling options that you may potentially need at 38?
Your individual circumstances will also dictate whether buying property in 2021 is a good idea or not. Is your income steady, reliable and virtually set in stone? Do you have the capacity to do some serious saving for a deposit? What does your ten year plan look like when it comes to your finances? If you don’t have all the answers yet that’s okay, but it might be time that you met George and the team at Madd Loans.
Since their inception in 2012, the team at Madd have worked tirelessly in providing over 1700 Queenslanders with finance options to help turn their dreams into reality. With the entire brand being built on referrals, George takes great pride in making the loan process both fun, educational and stress free – and he has a swag of awards to prove it.
An independent operator can be your greatest asset when it comes to navigating loan options, as brokers are there to make you happy – not the banks. To speak to a Brisbane based home loan professional that also provides financial planning services, please get in touch with the team at Madd Loans today to help turn your financial dreams into reality.