Amid a year of pandemic, state-wide lockdowns, border closures, mass job losses and the first ‘recession’ to hit Australia in almost 30 years, the Gold Coast housing market surged. This surge saw suburbs such as Elanora and Currumbin Waters seeing median house values increase by as much as 8% during the COVID-19 pandemic.
So, what’s in store for the property market in 2021?
As remote working opportunities become more normal and demand for lifestyle properties in lower-density areas increases, regional areas of Australia such as the Gold Coast are likely to continue to see housing markets surge in the first quarter of 2021.
Key driving factors:
- Record low-interest rates and a loosening of borrowing criteria
- Approx. 28% less supply of houses for sale (year-on-year)
- No international travel encouraging ‘property upgraders’ and lifestyle-driven interstate migration to the Gold Coast
- Ongoing financial relief from JobKeeper, JobSeeker, mortgage repayment deferrals and early access to Superannuation
- Continuation of incentives such as First Home Buyer and HomeBuilder grants
- International approval of COVID-19 vaccine
However, with government subsidies and mortgage payment deferrals due to end after the first quarter of 2021, there are also some key challenges for the property market to overcome.
According to recent data from Digital Finance Analytics, over 1.1 million Aussies are planning to sell their property within the next 6 months, which is an increase of 226% over last year’s figures. While it’s likely that not all surveyed will sell in that time period, the increase in houses on the market is looking to be significant.
Selling conditions for units will likely perform weaker in 2021, especially in tourist-dependent areas such as Surfers Paradise, Broadbeach and Coolangatta. With no international tourism and population growth at an all-time low, holiday investment properties may be hit the hardest.
As a result, we may see investors deciding to sell, which will create an over-supply of units on the market. This could create good buying opportunities with a longer-term outlook.
With approximately 66% of Australians owning their own home (with or without a mortgage) and 1 in 5 owning one or more investment property – homeownership still remains a huge part of the Australian way of life.
It will be interesting to see what 2021 has in store for the property market. As always, the views expressed in this article are opinion only and all readers should rely on their own information and advice.
