Welcome to our monthly Real Estate Report for May 2021
With winter now on our doorstep what effect will the change of season have on our property market? If you ask me, nothing! Winter is historically a time when fewer listings are released to the market for sale, as potential sellers prefer to wait until the busier warmer months to present their homes to the market. In a cycle where listings are already short, the supply V demand disparity looks to continue. Throw some record low (near zero) interest rates on top and what seems to be a few hundred thousand ex-pats all returning to the country, and I feel you have a pretty good recipe for a strong property market.
When will the craziness of the property market end? Who knows, but in my eyes, unless something unforeseen happens we are set to continue as we are for the short term. The effects of the pandemic have sparked many new trends and there are still many Australians out there rearranging their lifestyles as a result. I know just yesterday our office dealt with some potential buyers from Victoria, who indicated the continuous lockdowns in their state has forced them to say enough is enough, it’s time to relocate, and somewhere like Bellingen looks pretty good.
Locally looking across all of the listing portals and talking to a few local agents the feedback seems to be the same, nowhere near enough listings to meet demand. Normally this continues to push prices higher as buyers compete for what little housing is available. And no doubt, many a buyer is forced to look elsewhere in other areas in an attempt to get what they need.
The question on everyone’s lips out there now seems to be just how long can this upward cycle continue, what goes up must come down, right? Well, to a point that statement can be somewhat correct, property increasing by tens of thousands of dollars, or even hundreds of thousands of dollars every month is just unsustainable. I know in the 26 odd years I have been in the industry in our beautiful Shire, I have been through a number of cycles. Upward cycles, downward cycles, and long periods of somewhat flat prices where things seem to find a level and stick to it. I know for myself I have always worked on, nothing is more important than your own home for your family, so buy when you can afford to. If you can do it now, do it. The worst-case scenario is that prices do come back a bit- just don’t sell! Wait for better times if you can.
Another factor for any homeowner out there to consider, be it a rising market or falling, as long as you have your own home what the market does can be somewhat irrelevant. Should prices rise, you can sell yours for great money but to buy again in the same area more than likely you will pay plenty too. Same with selling in a falling market, you may be a bit disappointed with the price you achieve but pleasantly surprised with what your money can then buy.
Without a doubt, increasing home prices does not benefit everyone, however, being the optimist I am I look for the positives out of situations that are beyond my control. I recently read an article in the Sunday Telegraph about an 80-year-old vendor who had to sell his house because COVID-19 killed his business of 30 years, so things were looking pretty dire. It was an old fibro house in Western Sydney, and it sold for $1.81m, which was nearly four times what he paid for it around ten years ago. He was quoted saying “the sale has changed everything, I do not have to worry for the rest of my life”. So no doubt property ownership can be life-changing and for those fortunate enough to have the foresight and be in a position to buy, it can be extremely rewarding.
Nationally as per an article released by CoreLogic RP Data, for the second time in 3 months growth conditions in capital city home markets outpaced the regional markets. The combined capital city index rose 2.3% in May compared to a 2% rise across the combined regional areas. Their article also mentions Australia’s housing market remains firmly entrenched in a housing boom across most region’s of the Country. And the reduction of the Federal Governments fiscal support seems to have little to no impact on housing growth in home values to date.
As per most data we receive, it is a little delayed, but some of you out there may be interested in below;
Here are the top regions for house price growth in the year to April 2021
- Richmond-Tweed, NSW 21.9%
- Southern Highlands & Shoalhaven, NSW 19.5%
- Launceston & North East, TAS 18%
- Capital Region, NSW 17.5%
- Newcastle & Lake Macquarie, NSW 17.5%
- Sunshine Coast, QLD 17.5%
- Gold Coast, QLD 16.6%
- Mid North Coast, NSW 14.9%
- Illawarra, NSW 14.8%
- Wide Bay, QLD 14.6%
Source: CoreLogic Regional Market Update released May 2021, SA4 regions
Here are the top regions for growth in dwelling rents in the year to April 2021
- Richmond-Tweed 17.6% (now $590 pw)
- Central Queensland 15.3% ($340 pw)
- Sunshine Coast 15% ($550 pw)
- Southern Highlands & Shoalhaven 13.2% ($620 pw)
- Bunbury, WA 13.1% ($390 pw)
- Mid North Coast, NSW 12.7% ($430 pw)
- South East, TAS 11.9% ($400 pw)
- Launceston & North East, TAS 11% ($400 pw)
- Gold Coast, QLD 10.9% ($530 pw)
- Central West, NSW 10% ($390 pw)
Source: Growth in regional rents is almost three times that of capital cities, CoreLogic, published May 24, 2021
Some fairly positive growth for both sales and rentals. I guess, if you are renting, you are paying a landlord, or if you have bought, you are paying the bank, either way, you commit to paying for your housing.
So there you go, that wraps up another month. Until next month, stay safe and be thankful for where you live. Should there be any real estate queries or assistance you may require, feel free to give our friendly, helpful staff a call on 02 6655 1049