In this week’s episode, Dave, Cate and Pete take you through:
- 2020, the year of the first home buyer. First home buyers have been entering the market in droves and hitting record numbers in 2020, taking advantage of the many incentives available. First home buyer activity has also propped up the construction industry, which certainly helped the economy. But when will investors return to the market? The trio share their insights.
- The outlook for interest rates. Not only are interest rates the lowest they’ve ever been, but fixed rates are also lower than the standard variable rate. What times we live in! The Property Planner explains why fixed rates have dropped so far, how long we can expect interest rates to stay low and potential future issues that may arise due to a sustained low rate
- What economic cliff?The levers that the government can pull to prop up the economy and support during downturns are many and varied, and we haven’t seen any sign of the dreaded ‘economic cliff’ trumpeted by doomsayers. Let this be a lesson to the naysayers!
- Houses v units. How did houses fare compared with units? It comes as no surprise that units, and particularly small apartments, were the hardest hit during 2020. Downturns often reinforce the weaker areas of the market place and this has played out in 2020.
- The great renovation. We’ve lived through the renovation boom and our houses are growing to be the biggest in the world. We are truly the lucky country, but how structural will this change be once people start heading back to the office a couple of times a week?
- Regional locations – capital growth and sales volumes. Regional locations have been the star of 2020, outperforming capital cities in both capital growth and sales volumes with some stellar numbers. But will regional locations remain at the front of the pack in 2021? The Property Planner and Buyer make their predictions.
- Why did the property market remain resilient?Overall, national property prices increased by 3% throughout the year and the trio share their insights on the key factors that kept the property market chugging along through 2020, driving the quickest recovery we’ve seen in a property downturn over recent decades.
- And of course, our ‘gold nuggets’!
David Johnston- The Property Planner’s Golden nugget: downturns reinforce the weaker areas of the market place, we’ve been talking about off the plans and medium to high density apartments are high risk and they are what’s been hit the hardest during this downturn. Capital cities, it’s worth remembering Melbourne home values are minus 4.1% below their March peak, Sydney dwelling values have 3.9% to recover from their 2017 peak and Perth values remain about 20% lower than their 2014 peaks. So those numbers put in perspective where we’re at and how property values have been pretty flat for a long period of time. And why for all the reasons we’ve discussed today we’re going to see an upturn of property values in 2021 and 2022.
Cate Bakos – The Property Buyer’s Golden nugget: data and interpretation and understanding the timeframe behind the data. A lot of sales are not recorded until they settle. We can expect to see the actual data for 2020 in February and March, and there will be a stronger tail/tale to tell.