Tumultuous and challenging, 2020 tested the tenacity of just about every person on the planet.
And in Australia, we’ve really shown our mettle.
Our national response has been a very Aussie one – we get on with it, help each other where we can and conduct ourselves with a healthy dose of good humour and humility.
This has been a recipe for success in not just weathering the worst of the uncertainty, but also delivering some surprisingly strong outcomes in terms of community, health and finance.
Among the upsides was the property market which demonstrated an uncanny knack for resilience.
It proved itself to be a foundational beam for our national and personal economic wellbeing.
That said, not too many commentators would be bold enough to suggest today’s property market is exactly the same as it was 18 months ago. The drivers that influence how we buy and what we invest in have altered. Understanding these will put you ahead of the pack this year.
Here are what I consider to be the five key influences that will drive Australian property prices in 2021.
- More locational choice
Last year demonstrated that businesses and their employees don’t need to be grouped together and centrally located from 9am to 5pm each weekday in order to survive and thrive.
The work-from-home revolution was underway before 2020, however its adoption was accelerated by the pandemic.
So, we now live in a world where being based at a home office – if not fulltime, then at least for a few days each week – is not only accepted, but actively encouraged.
And that’s delivered the freedom for thousands of households to choose where they want to live.
In short, people will select their desired location based on their individual lifestyle needs, and not where they work.
Expect to see increased activity in lifestyle hubs throughout 2021. Professionals relocating to beaches and hinterlands. They’ll look for areas with great schools and parks, decent transport options, fast internet access and exceptional service and facilities – but not necessarily within a 20-minute commute of a fixed workplace.
- A wave of skilled migrants
Australia is the envy of the world when it comes to our virus response and impacts.
According to a report release in January this year, the Lowy Institute ranked Australia as the 8th most successful county worldwide at dealing with Coronavirus.
As we continue to navigate the pandemic and when Australia reopens international borders, expect to see a dramatic influx of international migrants.
The attraction of being located in a country that has managed to maintain some modicum of normality while supressing outbreaks will be tough to ignore for anyone with the means to travel to Australia and work here.
This will be assisted by our government as well. Highly skilled workers from overseas will be encouraged to relocate to our shores. They will be integral to improving our economy. Not only will their work skills benefit our nation, but by living in our country and paying taxes, they’ll be part the money flow that drives our fiscal position.
This migrant wave is a huge upside for property markets, with demand for purchases and rentals sure to rise across many price points and locations.
- Detached homes & townhouses will lead the price charge
Another lesson delivered by the pandemic has been the importance of liveability in our own homes.
During the lockdown, those who found themselves confined to a small, inner-city unit were at risk of going stir crazy. If your entire world was a kitchen, lounge/bedroom and bathroom across 70 square metres (or less) of floor space, then you’d be forgiven for feeling a bit claustrophobic.
Now things have eased, expect disproportionally more demand for detached homes and townhouses over units. Families, in particular, will need easily separable living, working and play areas.
For property investors, this means seeking good floorplans with home offices and space. These dwellings will attract tenants and have buyer appeal in the long term.
- Southeast Queensland is in the box seat
The Sunshine State was a bridesmaid property market for well over a decade. Throughout the Sydney and Melbourne booms, Brisbane and its surroundings just continued to plod. It couldn’t get any real traction and Southeast Queensland property owners could only look on in envy as Sydney saw price rises of over 70% in a relatively short period.
But that looks set to flip in 2021 and beyond.
Queensland has lower density living, appealing lifestyle attractions and affordable housing. In addition, the state could be seen as THE east coast success story of the pandemic. With borders now down, plenty of Sydney and Melbourne resident will be rushing up north to stake their claim.
Buying the right type of investment in a Queensland location with excellent growth potential will reap huge rewards.
- Easier access to loans
For too long, property buyers have been straining under the yolk of restrictive lending.
Despite the fact that Australian property buyers are among the safest bets on the planet for banks, moves to make lending tougher were introduced around four years ago. The result was a very sharp slowdown in property markets driven by a lack of lending.
Cue forward to 2021 and we are seeing the lowest interest rate environment in living memory. In addition, moves in the first half of this year will see the path to securing credit become a bit easier for borrowers as responsible lending legislation is wound back.
More credit means increased property trading – and that will be great for those who decide to invest sooner rather than later. With historically low interest rates, making many investments cash-flows positive represents a great opportunity to take advantage of this time to invest.
I’m feeling very bullish about the property market in 2021, but it will be imperative to carefully analyse the investment options and understand all available data. By relying on qualified property investment advisors to guide you on building a portfolio, you can look forward to some exceptional returns in the next 12 months… and beyond.
Always review any property location research and investment analysis data, with a professional, QPIA (PIPA Member) qualified & accredited ASPIRE Property Advisor Network Advisor. Never rely on glossy sales brochures or property marketing information, ensuring a property is right for your strategy. Property Investing is about BUYING a property that matches your goals, never be SOLD an investment.
Visit www.aspirenetwork.com.au or call our office to be connected with a Property Investment Advisor on 1300 710 933.