The 2021 housing market has seen a major upswing from its 2.1% fall between April and October last year. In November, CoreLogic reported a 0.8% increase, which could very well lead to recovery as early as this quarter.
Buyer demand is being fueled by an increasing number of owner-occupiers (rather than investors) applying for low interest-rate loans, strong government incentives, and reduced fear of the coronavirus. And while the tax cuts and fluctuating economy stability will make it an unpredictable year, there are concrete reasons to make this your year to buy.
We’ll take a look at the factors that are influencing the right time to buy, and how engaging with the market sooner rather than later can save you money on your property ownership — especially if you’re looking at the Sydney property market.
While the pandemic unfortunately left some people cash-strapped, many Australians also found themselves saving like never before. With people cancelling trips and foregoing entertainment, household savings have reached levels not seen since the mid-1970s.
Borrowing costs have also never been lower, with the government continuing to infuse more money into the economy. Whether Australians want to buy an existing home or build one from scratch, lenders and government officials alike are encouraging them to make a move. Most of the stimulus measures are set to continue into this year and we should see interest rates remain low for at least the next 3 to 5 years.
Our prediction is that buyer demand is likely to remain high for the year, increasing both the inventory on the market and the overall number of transactions. We saw the value of lending for first-time homeowners to reach historic highs in October 2020, making it nearly 49% higher year-on-year. Our brokers are seeing many time-sensitive opportunities that we don’t want our clients to miss out on.
The Australian Board of Statistics (ABS) reported an increase in building approvals for the fifth consecutive month in November 2020. In the same month, property saw a 5.7% increase in value and a 5.6% rise in renovations, marking an all-time high. This good news is credited to an unprecedented combination of subsidies and interest rates — particularly for new home buyers.
No matter how strong the property market is, it can always be nerve-wracking to finally commit to a property. The COVID-19 threat may be falling to the wayside, but it hasn’t gone away entirely and could still cause plenty of unpredictability in the future.
Theo Chambers, CEO at Shore Financial, thinks that you’re better off striking sooner rather than later. Prices and demand will continue to move forward as the year rolls along and buyers could very well feel the regret if they hesitate for too long. (The federal government has extended the HomeBuilder scheme until the end of March 2021, ensuring that first-home buyer activity is likely to remain high at least until then.)
Of course, this is not to say that every single person is better off buying now. Whether you’re employed in a precarious industry or evaluating the amount of passive income you receive every month, personal circumstances still matter. You might need to improve your credit score first by paying off old bills or decreasing your current credit limits.
If you need advice on how to take the fastest route from your current finances to securing a residential property, Shore Financial has you covered.
However, if you’re feeling secure in your job and you have the credit score to back up your loan application, you might find yourself a property owner in 2021. If you’re interested in finding out more about buying a property, Shore Financial has a First Home Buyer Guide as well as a loan comparison calculator that can help you do some prep work before you reach out to a team of property experts.
Even if we’re likely to see some roller-coaster months, the property market remains resilient. The government is extending a hand out to home buyers to help them feel more confident in the market, but also as a way to fulfil dreams after such a difficult year.
Shore Financial understands what it takes to turn your goals into reality. We can tell you more about what you can afford, how the lending process will work, and whether you qualify for certain subsidies. First home buyers especially should be paying attention to what’s available right now because it won’t necessarily last for much longer.
If you’re ready to take that next step, our team will guide you toward choosing the right property for you. Reach out to us today to get the ball rolling sooner than later.