Australian property report 2021
Source: Belle Co from Pexels.
  • National property market on 'recovery trend' trajectory
  • Canberra and Hobart sit at record high values
  • Low interest rates set to continue positive impact
  • Continued border closures will have downward effect
  • Inner-city Melbourne rental markets at most risk
  • Some volatility will continue, but outlook positive overall

As the world stopped – in shock – as the global pandemic took hold in March 2020, many observers worried about what was in store for the economy and life generally. Let alone the property market.

Evidence from Core Logic’s annual Property Report suggests that despite Australia’s first official economic recesssion (defined as two successive negative quarters of economic growth) in 28 years, property values “have been resilient”.

“As of November, Australian housing values were 1.1% higher over the year, with an estimated total value of residential real estate recorded at A$7.2 trillion.”

“While the initial shock of COVID-19 led to a -2.1% decline in national property values between April and September, the trajectory of dwelling values began to recover through to November.”

The report, mainly written in November 2020, says that early data for December is showing a continuation of this trend.

Low interest rates, deferred mortgages, support for low income households, and other government support have greatly assisted the property market in showing strength amid the backdrop of an unprecedented global shock.

The high end of the market also held firm, and generally the property market has been far less volatile than, say, the stock market.

That’s not to say everything was a bunch of roses. Unit prices in Melbourne, one of the worst hit areas for the virus, fell 3.4% between March and September 2020.

Meanwhile, the so-called ‘race out of the city’ – much heralded in the media – led to strong property price growth in some regional areas. Regional areas saw prices grow +5.7% as compared to urban markets of +2.4%.

It’s in the rental market where there has been most variety across the country. With an almost total drying up of overseas entrants looking for rental properties in Melbourne, Sydney and Brisbane, there was a “different dynamic” in rental markets in Perth and Darwin.

As investors had long since deserted some markets due to very low rental yields, some rental markets began to tighten. The mining town of South Hedland in far north Western Australia saw “the highest rental yields for units across the country”. Perth rents rose 8.2% over 2020.

Into 2021

Current relatively higher demand for dwellings, the easing of the COVID pandemic emergency and continued low interest rates have led to an almost elastic band reaction, springing back into one of the hottest property markets for a while.

First home buyers are back, investors – in some paces – are back, and this seems to counter the far lower levels of migration-fuelled population growth that can also feed into prices and activity.

It may be time to make hay while the sun shines.

You May Also Like

Australian housing market upswing extends into the New Year

Positive price momentum rippled into 2024 as CoreLogic’s latest results show a rise in dwelling values.

Australian home values hit a new high in November, marking a V-shaped return to form

November marks a triumphant return for Australian home values, soaring to unprecedented heights, signaling a robust market rebound.

More properties are selling below estimated prices

Properties are selling below estimates in all states suggesting that buyer sentiment has declined

Residential prices, volumes expected to decline in 2023: HTW

Once inflation and interest rates peak, greater consumer confidence should stabilise the residential property market in late 2023.

Top Articles

PropertyGuru Asia Property Awards (Australia) returns for its 7th edition, including several brand new award ...

This year's awards include several brand new categories, with entries closing 2 August 2024.

Rentvesting in Australia: A deep dive

Rentvesting offers an alternative path into the property market for priced-out first-time buyers.

Housing crisis survival guide: How to buy your first Australian property

Three property experts give the low down on how to nab a home in this tough housing market.