The pandemic has seen a massive disruption to many businesses in the last 12 months including tourism and local F&B business but while earlier predictions were saying the property industry was going to plummet it’s proven to hold its own in a turbulent time.
During the most challenging times of the pandemic, there has been every prediction under the sun circulating for the property market. While it was first thought the pandemic was going to bring the property market to its knees, the latest reports and data coming from industry experts are suggesting an entirely different story.
Since October, according to Core Logic Australia’s leading property data firm, data suggests house prices nationally are up, with a 0.4 per cent rise.
Every capital city saw a slight gain, except for embattled Melbourne which is still losing value.
The concern in the public’s confidence has been the talk of the country in recession; however, economic spirals don’t always affect the housing market because it also coincides with when the Reserve Bank is trying to stimulate the economy by making the cash rate very low.
In a recent statement, Reserve Bank deputy governor Guy Debelle has declared Australia is technically out of recession, and that the September quarter should show the economy growing. While this news is positive, and the four big banks are saying the ‘technical recession’ is over, there are still over 930,000 people in Australia unemployed, so it’s safe to say it’s a little earlier to celebrate.
So what factors have made the most significant positive impact?
Several factors have come together to drive up sales including low-interest rates, an increase in first-home buyers and other buys taking advantage of the work-from-home lifestyle shift, new homebuilders grants, job creation packages, infrastructure spending, a warmer climate and opening borders.
Coastal properties with affordable lifestyles were already showing growth before the pandemic, but now with more people being able to benefit from working from home, the pandemic has given it a little more of a nudge.
There has been a couple of critical items which have incentivised both investors and homebuyers to act now.
These are:
Homebuilder grant
Earlier in the year, the Government unveiled the new $25,000 Homebuilder grant package as an incentive to begin renovations or start building new homes.
Interest rate cuts
Home loan rates are at an all-time low with The Commonwealth Bank just announcing the move to be the first of the big four banks to make a history-making rate cut, slashing their fixed rate home rates but keeping variable rates stable. Now they are offering a rate of 1.99 per cent over four years – the lowest ever advertised home loan rate ever offered by them. Borrowers, especially first home buyers, are taking advantage of this once-in-a-generation phenomenon.
Job growth expected
As of last month, 80 per cent of Australians who lost their jobs or saw their hours slashed at the start of the pandemic are back in work, and 650,000 jobs have been created in the past five months with more expected in 2021.
Working from home benefits
The pandemic has shown an entirely new shift in the way people are working from home, and statistics are showing the new way of living will continue long after restrictions finish. A recent survey suggests 93 per cent of people would like to continue with the option of working from home remotely at least some of the time and 86 per cent of parents now want to work flexibly compared to only 46 per cent before Covid-19.
At Percival Property we’re happy to arrange a time with you to discuss the current market in Port Macquarie and homes we have available and coming up in the new year. Contact us today!