As the year comes to a close, it’s becoming more and more apparent that the property market is shifting from a buyers market into one that favours sellers. Property prices are on the rise as interest rates continue to fall, creating the perfect storm for sellers to benefit.
Melbourne reclaimed its place as the auction capital with 874 homes to auction over the weekend ahead of Sydney at 871 according to Corelogic data. Nationally there were 2,065 homes on auction at a clearance rate of 75.1% on the weekend which is an improvement from the week before but still below the 2,912 auctions in 2019. The number of auctions and listings are expected to keep rising with house prices predicted to jump 8-12% in Melbourne and Sydney, while South East Queensland jumps 6-10%.
These numbers are significant as they mark further improvement from the 2020 lows. Furthermore, they reflect the fact that buyers are out and about, looking for new homes – and that supply isn’t currently meeting demand, which will drive prices upwards.
House price forecasts for 2021
|Brisbane and SEQ||6-10%|
|Canberra and ACT||5-8%|
Riskwise Property Research chief executive Doron Peleg said the latest forecasts reflect improved market conditions, stimulatory settings, and the successful containment of Covid in Australia.
“While some risk areas of the market remain, especially in some of the oversupplied unit segments of the market, overall, 2021 is set to be a strong year of capital growth in Australian property,” Peleg said.
Buyersbuyers.com.au chief executive Pete Wargent said the jump in price predictions over the past three months have pushed the market in favour of sellers.
“Enquiry has picked up strongly over the past six weeks, initially from first homebuyers, but now also from investors,” Wargent said. “We expect to see a strong 2021 for housing, with more and more investors coming back into the market. With investment loans now available in the 2 to 3 per cent range, comparatively speaking yields are now looking more attractive in many areas, and the investors are returning.”
Despite what looked as a year of turmoil for the property industry major banks have scrapped initial forecasts which saw prices dropping up to 15 per cent.
Meanwhile areas including the Byron Shire have seen house prices surge and top school catchments have increased by 25 per cent or more in the past 12 months.