At the midpoint of another turbulent year, Ashley offers his unique observations on Australia’s property market. When you live and breathe this industry, you have countless conversations – with purchasers, first home buyers, downsizers and investors – that combine to give you an incredible insight into the market.
Late last year, Australia was managing the pandemic, and we noticed a shift in people’s priorities – a desire to move forward with their lives. As established real estate hit its highest point ever, even pre-pandemic, people wanted to downsize their lifestyles while their wealth skyrocketed. Simultaneously, first home buyers had access to generous state and federal grants but were priced out of most established markets. Real estate became a compelling proposition but buying off the plan began to make even more sense.
Affordability will remain the big issue looking forward, and when rates eventually go up, you could see pressure on people who’ve borrowed too much. We’ll continue to see strong growth in more affordable regional areas because of the working from home boom. We’ll also see more interstate migration, particularly to lifestyle states like Queensland, and trends in design that’ll facilitate homeworking – like integrated workspaces and hubs.
Something new to look out for will be the ‘50-square-metre conversation’. Australian banks and homebuyers have rarely considered anything below 50 square metres as quality real estate, impacting purchasing behaviour and lending habits. But younger generations are more willing to live their lives outside their four walls – they eat out more and use local amenities like parks and urban spaces. They’ll choose their preferred suburbs and compromise on size so they don’t overstretch financially. As it becomes more prevalent in future, banks will have to look at lending for that type of property and purchaser.
Finally, while we’re experiencing a period of sunshine, that’s not to say it’ll be short-lived. Border closures and lower immigration isn’t an issue due to the pent up local demand. When borders open up again, we could see another upswing in prices thanks to Australia’s handling of the pandemic. People overseas are going through the same mindset shift Australians went through – their priorities are changing. They want to move forward with their lives, too, and Australia’s never looked more attractive.
