Worth’s 2021 Property News Wrap Up!
Well, it’s been another huge year (as you’re very aware!).
It’s hard to believe that 2021 is almost over. We’ve endured yet another rollercoaster of a year, and so much has happened, particularly in the Australian property market.
As always, I want to take the time to look back and reflect on the year that was for the real estate industry, as well as discuss my predictions for 2022.
So, without further ado…
From doom and gloom to record-breaking boom
2021 brought with it a real estate boom that we haven’t seen in decades.
Some so-called experts initially predicted that the property market would drop by up to 30%, leaving investors hesitant to buy-in.
As it turned out, however, the exact opposite took place right around the country. With record-low interest rates, thousands of returning expats, a rise in interstate migration and no spending on international travel, 2021 saw one of the greatest real estate booms that we have ever seen – and likely won’t see again for a long time.
It’s quite rare for an entire country’s property market to rise simultaneously, but that’s exactly what we saw this year. According to Domain, Aussie house prices rose an eye-watering 21.9 per cent, the fastest annual rate of growth on record.
In the year to October, Australian rent values increased 9.2%, which is the strongest annual appreciation in rents since February 2008. There are many locations with super low vacancy rates, some at levels not seen in decades, it’s the perfect storm for investors.
My Buyer’s Agent tip:
With so many predictions being made for 2022, it’s best to take each one with a grain of salt. Before making a property decision, it’s important to do your own research and consider the various factors, such as your finances and personal property objectives, among other things.
Prices Have Skyrocketed Beyond Affordability!
Although prices have increased dramatically over the past year, wages have largely stayed the same. This means that the average price of a property in some areas has now reached a point beyond affordability. The median price of a home in Sydney or Melbourne now comes in at over $2 million – which is not ideal for the average homebuyer.
Banks are putting borrowers under more scrutiny on their living expenses, which is causing major headaches for borrowers and delays with processing home loan applications. In addition, there is an increased buffer to the servicing calculations that will further push potential buyers out of the current market.
While the price increase and ultra low-interest rates may be a good thing for investors, it has made it harder and harder for the average couple or family to achieve the great Australian dream. The best option to enter the market would be Rentvesting, this will help aspiring buyers so they can start benefiting from capital growth.
My Buyer’s Agent Tip:
Keep a close eye on the ongoing trends in the property market. This will help you find properties that better suit your needs, preferences and budget. When it comes to property investing, it’s about facts, figures and market research, not emotion!
The Pandemic Opened Us Up To New Options
While the property boom saw prices increase all over Australia, regions where housing was already significantly more affordable before the boom experienced a far steadier rate of growth, making them much better options for property investors and homebuyers this year.
As prices continued to rise in Sydney and Melbourne, areas like Queensland became much more appealing, as housing largely stayed within the affordability range, despite the increases.
The pandemic also prompted more people to reconsider their lifestyle, and with the rising popularity of remote working arrangements, many decided to move to places like Queensland to satisfy their craving for a better life.
On top of this, the announcement that Brisbane will be hosting the 2032 summer Olympics saw investors take the opportunity to buy in Queensland now – planting the seed and settling in for the long term.
My Buyer’s Agent tip:
Sydney and Melbourne will always be big. But with the changes that the pandemic has brought, more promising options are now available. We now have the opportunity to choose a location that satisfies our requirements for a great home and the ideal lifestyle.
What To Expect In 2022 For The Australian Property Market
While interest rates have remained at record-lows all year, we know that these will eventually start to go back up. It may happen gently, but it is inevitable.
When this does happen, it will make it even more difficult to get into the property market. At some point, owning a house in some cities may be a completely unaffordable option. That’s when areas like Queensland will become the best choice for investors and those looking to set up roots.
As It Stands, 2021 Has Showed Us That The Best Time To Act Is Now.
So don’t wait.
At Worth Property Investing, we are your partners in finding the perfect property that lets you enjoy your life to the fullest.
The state borders will be open soon, so if you’re on the move and looking for a change, contact us today on 1300 897 874. You may also book in a FREE Discovery Session for the New Year to start achieving your property dreams.
That’s a wrap!
From Simon Read and our team at Worth Property Investing, we wish you a very Merry Christmas and a safe and Happy New Year!