Approximately 72% of home buyers said that some states have adopted stimulus measures such as HomeBuilder, first-time homebuyer incentives and stamp duty relief to make buying or investing in real estate “more attractive”. The low-interest rates stimulated 79% of potential buyers. Although there are many challenges such as unemployment rate and job insecurity, it is hoped to see how market sentiment and sentiment rebound. In 2021, as the COVID epidemic situation is under the control, the real estate market has signs of recovery, investors back in full force this year. Sentiment within this group is bouncing back, and low-interest rates make investing in property a more attractive option.
What can we expect in 2021?
The spring property season keeps busy until the start of this year and all signs point to raised levels of activity continuing for the coming months. This is good news for suppliers and buyers as the market is offering prospective buyers more choice, and more opportunities for suppliers. The house values rose in January, up 0.9 per cent over the month nationally. The national economy will be helped in 2021.
The new ABS loan indicators data released last week shows that the total amount of new house loans in December increased 8.6%, reached 26 billion US dollars, and increased 31.2% compared with the same period last year.
It was the new residential borrowings that paved the way. The value of construction loans increased by 17.1% from the previous month. Since the launch of the HomeBuilder grant in June 2020, this figure has been as high as 122.4%.
First-home buyers were also very active, with the number of loan commitments up 9.3 per cent in December and up 56.6 per cent over the 12 month period
According to an analysis by the Reserve Bank of Australia, increased borrowers’ confidence in record-low interest rates may push up real estate prices. In an internal document obtained through the Freedom of Information Act, the Bank of Australia predicted that as borrowers believe that the lowest interest rate will continue to exist, the value of homes could rise by as much as 30% in just three years.
In recent years, demographics have been the driving force of housing demand. Although the birth rate has been declining, Australia continues to maintain a high rate of overseas immigration. With the closure of international borders this year and what seems to be until 2022, this will pose challenges for the new housing sector.
Overall, 2021 will be a strong year for the real estate market, but some areas will perform better. For the first-time homebuyers who want to set foot on the real estate ladder, established homebuyers who want to upgrade, or investors who want to preserve the real estate, the cost of holding is lower than ever. In unprecedented times, we don’t have to worry about the foreseeable future rise in interest rates.
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