Post-COVID Housing Market Expected To Hit Records High Since The 1980’s
It was just months ago that the dire predictions of a COVID-caused housing market price crash were coming in thick and fast from economists, yet it seems like a lifetime ago when you look at the market now. What we are seeing in Australia is almost unprecedented…prices set to soar in all capital cities and major regional areas at once.
Already this year we have seen outrageous results at auctions as homebuyers try to get into the market.
Recent reports have predicted an average 17% value growth in homes across the nation’s capital cities.
The last time a boom like this happened was in the late 1980s, which was then followed by double digit interest rates and a recession in 1990-91. Soaring prices may sound like trouble if you’re looking to buy, but it isn’t all bad. It’s not too late or too hard to get your foot on the property ladder, you just need to know where, and how, to look.
Why is this happening?
The economy took a hammering last year, with the financial fallout from various lockdowns seeing unemployment shoot up and many thousands of Aussies forced to queue up for government stimulus help.
Banks also gave people mortgage repayment holidays and landlords were encouraged to give tenants rent holidays or discounts too, provided they could show they were affected by the lockdowns. So not only did people stay afloat, but some were in a position where they could expand and spend more.
First time buyers were given exemptions, grants were handed to those looking to build new or carry out renovations and various other stimulus was flushed through the economy. Near non-existent immigration also meant more opportunity for buyers to do their best.
The RBA even announced a $100 billion quantitative easing program in which it would be buying Australian government bonds. Find that confusing? It basically means they’re printing more money. When governments and banks print more money, the end result is usually inflation and sometimes hyperinflation.
But there’s no inflation in Australia?
There is actually, in the form of rising property prices. All that money printing and stimulus has given Aussies more money, which they are in turn spending on property. And you can understand why. We are told the economy is volatile, so rather than putting our faith in cash savings, or stocks, many of us want assets that will retain their value for now, grow in value in the future and return cash in the form of rental income.
Combine our love of property with the fact interest rates remain at record lows, while the RBA keeps promising they won’t be going up for at least three years, and the demand for bricks and mortar is through the roof. The supply, however, is not so healthy. So the properties that are available are selling big thanks to the competition.
When’s the right time to buy?
It’s always the right time to buy somewhere, as long as you know where to look. Binvested has had an incredible financial year, helping clients build double digit portfolios even as economic confidence crumbled around them. So, now that we are looking at 10-20% growth this year all over the country, you have the opportunity to make some serious equity if you can get into the market now.
But in markets like these, average buyers need help. You’re not likely to jump online and find a great deal on a listing portal, it’s all about who you know.
The reason Binvested has been able to help so many clients is that the runs are already on the board. The years of work that Binvested founder Nathan Birch put into researching property, contacting agents all over Australia and positioning himself as the go-to guy when agents are looking for a hassle-free off-market sale, means that clients can simply turn up and take advantage of the deals being sent Nathan’s way. These deals aren’t available to regular buyers.
So if you need help expanding your base and taking advantage of the growth cycle ahead, reach out to Binvested.