How the Pandemic Changed the Australian Property Market
Posted by Tristan Angelini on 01 October 2021
Just recently, CoreLogic released statistics showing that Australian house prices are “growing at their fastest pace annually since 1989”. Right now, is arguably a good time to invest and sell. So many investors are getting excited about the booming property market in Australia. However, experts are saying that it could change soon due to an apparent downward trend.
The national home value index rose 1.5% in August and annually, the rate rose to 18.4%. While this was still considered above average, it can be said that it’s relatively smaller than in the previous months since January this year. The slowing growth rate can be an indication of a change that’ll soon take place when it comes to the demand.
In March of this year, the Australian international border was closed due to the COVID-19 cases and the Delta variant. While it is a necessary step to protect everyone from the virus, of course, it had an impact on the economy. Employers and workers had to adjust to the whole situation, and this includes the lack of international students coming to the country that left the housing sector in such a bleak state.
One way the pandemic changed the Australian property market is how the housing prices became even more unpredictable. Experts have pointed out that housing prices have increased 11 times faster than wages due to the pandemic, and this has made it difficult for so many to find a place to stay. And the uncertainty due to the lockdowns and restrictions just kept growing. Despite all the doubts, one important thing that the pandemic revealed about the property market is that there is a strong demand for housing, but affordability and supply are two of the biggest problems.
There is a strong demand
Even before the pandemic, interest rates were already pretty low and the RBA has no plans to increase until 2024. Raising rates anytime soon will not solve the housing affordability crisis so this is a smart move. The demand for apartments and detached houses is quite strong right now according to market investors and sellers. The pandemic reminded so many of us of the value of having your own space where you can be safe during such problematic situations. So many people have also benefited from having their own property by making an investment out of it. This reassures us that the demand will not die down anytime soon. T
The Australian property market is resilient
Another important thing that the pandemic revealed about the market has to do with its resiliency. Three years before the pandemic hit, a large price adjustment took place. Price increases were also observed during the past year around the same time income support and house building grants were offered and delivered. This was instrumental to maintaining employment and businesses. Low mortgage rates and repayment deferrals were also helpful. The Australian property market goes on cycles and with everything that has been happening, so much can happen. The good thing is, Australia has an open economy that is desirable to so many foreigners and investors around the globe. Industry experts are confident that the sector will continue to thrive.