The effects of the pandemic on Australia’s housing market has been relatively benign, as outlined in a report released this month by CoreLogic.
Focusing particularly on Sydney and Melbourne, our two largest real estate markets, the report reveals that we’ve weathered the pandemic exceedingly well.
Key factors that have underpinned this success include:
- generous and wide-reaching government assistance for homebuyers
- record low interest rates
- government stimulus packages such as JobKeeper, which enabled many Australians to retain their job
- the ability of many to save additional income while not being able to travel or attend public events
- below average listing volumes
CoreLogic’s research shows that Melbourne’s lengthy lockdowns during 2020 had a comparatively high impact on our State’s housing market. It reveals that our peak-to-trough property values declined by -5.6%. However, we’ve not only recovered this lost value in 2021, but are now experiencing record high market values.
Besides fluctuations in property values, a noticeable trend that’s arisen through our experience of lockdowns is an increased preference for secondary living space. I recently published a blog on this trend and it’s one worth following for anyone seeking to optimise the value of their property.
CoreLogic also highlights the exceptionally high sales volumes we’ve recently experienced. As they point out, “in 2020-21 […] there were approximately 582,000 transactions nationally [which] is the highest annual sales volume observed since February 2004”. This has come about despite periodic lockdowns and a below average number of listings in the 18 months.
With the official interest rate forecast to remain at 0.1% until 2024 and substantial government assistance available to homebuyers, we can expect strong demand for housing to continue for the foreseeable future.
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