As a Property Advocate, I’m very optimistic about the property market in 2021.
Just as we are about to close the door on 2020, many of us are watching the property market and economy hoping to anticipate what opportunities are likely to present themselves in 2021.
There are still so many variables at play when it comes to consumer confidence and our economic recovery and much depends on what unfolds next year. What we do know now is that it is the lack of property on the market is what is currently keeping prices up.
The property predictors remain conflicted in their view of just how strong a recovery is likely especially as economic support from the government such as Job Keeper and JobSeeker are wound back.
My thoughts on what 2020 will unravel in 2021:
For many city dwellers, the trade-off of space for “close to CBD” living was one once worth making. As the pandemic took hold, many of these workers began questioning this choice as they quickly fatigued of the same four walls day in and day out. So its now the toss up between space and commuting to work. Are we going to be in the office full time? Will we need to continue to need a office at home? Is this the time for work life balance?
Tree and sea changes remain attractive and viable
Our remote working lifestyle has taught us that we don’t necessarily have to have our roots planted in a specific location just for our work.
Shift towards developments further out of the city
As work opportunities and lower housing pricing continues to appeal in these outskirts, developments will consistently increase out of the city. The urban renewal projects and spending on transport such as the metro will only continue further this appeal.
First home buyers, is 2021 your year?
According to the mortgage brokers and banks a large majority are fixing their home loans and first home buyers are the first in line to leverage the historically low interest rates. The government’s First Home Loan Deposit Scheme (FHLDS) is about to celebrate its first birthday and has been extended to include an additional 10,000 places for the 2020-21 financial year – assisting first time buyers by guaranteeing their deposit up to the 20 per cent required which is normally subject to lenders mortgage insurance. Revised property price caps have meant more property is available to those looking to utilise the scheme, encouraging them to continue to enter the market.
2021 will be the year for construction
Whilst the construction industry has taken a hit through Covid, initiatives such as the HomeBuilders grant will continue to boost residential construction during 2021
A reduction of interest rates might be great for those who are looking to mortgage, but for investors in term deposits the latest round of rate drops means you are effectively earning $0 on your savings. This poses a dilemma for older generations of Australians who relied on this form of investment as an effective return for years. Add to this those who have withdrawn a portion of their super (for better or worse) due to financial hardship and the cash normally injected through this method has been reduced significantly. It has rightfully made some Australians nervous about how they spend particularly many wealthier retirees used the dividend of interest to live off. Many of those who comfortably put their money in cash deposits are now turning to property or shares to try and lift their returns.
Investors will have to rethink what their perfect investment property is
Investing in the CBD is decreasing and nabbing the one-bedder as a quick and tidy investment is unlikely to yield the results it once did. Investors are having to take stock of what we are now looking for in our homes, matching the style of property to what each demographic want to live in. Based on this, investments in homes rather than units and in the outer suburbs and regional areas will likely increase to match demand.
New builds: Offices will take pride of place at the front of the house
There is no place like a great home office – this is one feature that will dominate the new builds we see in the next year. Simply once a spare room which was converted and made functional, those who are building are keen to ensure that their home offices are built fit for function. For many this means taking into consideration the size of the space as well as its location on the floor plan. The return of the home office at the front of the home is likely to remain a key feature to these builds as accessibility and minimal noise disruption continue to play a large part in how we conduct business from our homes.