Thinking back to the start of 2020, nobody could have anticipated what was about to playout for the economy or the property market. But after a
lot of uncertainty and conjecture about what the future might hold, we’re almost at the end of the year and it’s remarkable to see that house
sales and prices are on a strong upswing.
Indeed, the number of residential property sales in the 10 months to 2020 was about 72,600 – the same as for the first 10 months of 2019. That’s
pretty amazing when you think that after the first five months of this year, lockdown had meant that the sales total was 26% below the same period in 2019. In other words, the rebound in recent months has meant that the effects of lockdown have been fully reversed. Moreover,
if it wasn’t for the low supply of listings available on the market, actual achieved sales this year probably would have been even higher still.
With most buyer groups having roared back into life – namely first home buyers and mortgaged investors – the strength of demand when set up against
tight listings is resulting in strong upwards pressure on prices. Indeed, the CoreLogic House Price Index showed a nationwide increase in average
values of 2.1% in November alone, taking the annual growth rate to 9.2% (the highest since June 2017, at 10.1%).
At the heart of all of this are low-interest rates, which are reducing the incentive to hold money at the bank, and raising the incentive to borrow
to enter the market. Alongside the temporary removal of the loan to value ratio (LVR) speed limits, these factors have bolstered demand and,
in fact, the property upswing has been so swift that...
