After a year like no other in 2020, the property market is ready to take off with renewed confidence in 2021. Here are five reasons why.
- Money is cheap
Low interest rates have made it more affordable than ever to get a loan and these record low rates can even be locked in for future years giving you surety about your payments. Banks and financial institutions are competing again for business meaning there has never been a better time to get your first loan or refinance an old one.
- Pent up demand
The number of properties sold every year has been significantly lower than normal over the past two years caused by the Covid lockdowns and before that, a variety of reasons including the federal election and the banking royal commission making financial institutions double down on lending standards. This means that there is a deep well of potential buyers hungry for more properties to come onto the market.
- Solid prices
Predictions of price freefall during Covid never eventuated with strong buyer demand and low quantities of houses on the market keeping prices solid and rises predicted for the new year.
- Strong auction clearance rates
While not every market sells via auction, they are nevertheless a good barometer of general market health. High clearance rates show there is strong buyer demand and seller price expectations are being met or exceeded. Across the major capitals, auction clearance rates were above 70 percent showing that the market is rebounding strongly.
- Low saving interest rates
Pitiful savings account interest rates mean trying to grow your wealth by banking your money is almost impossible. In comparison well chosen property investments offer both a higher annual yield and capital growth. Expect to see affordable properties snapped up as both investors and first home buyers return to the market.