What Will Happen to Property After Freedom Day in 2021?

  • 2 years ago

Monday 11th October 2021 marked “Freedom Day” in NSW, while VIC has been named as having the longest lockdown globally and Qld has been the most relaxed state of the three. So, what’s likely to happen to the property market over the next few months as we start emerging?

Whilst there are a number of factors that influence our property values, two of the greatest are that of supply and demand. Property values in Australia have risen significantly in the last 12 months as there haven’t been many properties on the market and there’s been plenty of pent-up demand stemming from the credit crunch and Royal Banking Commission in 2018 and 2019.

Many vendors haven’t listed their properties in recent months as they’ve been in lockdown and they’ve either thought they don’t want potentially infectious people coming into their home, their tenants have thought the same if it’s been an investment property or they’ve thought, what’s the point in listing my property if the majority of the buyers can’t come and see it and I can’t have a live auction.

Some properties have been listed though, as the sellers have thought that it’s a great time to sell whilst no one else is, there’s still buyers in the market and auctions can still happen virtually which might even pull in a few extra interested parties that are overseas or interstate and wouldn’t get to a physical auction.

As we emerge from lockdown, there’s a very good chance that more vendors will be keen to list their properties, increasing the supply. Not only will they be thinking that more buyers will be back out, but Spring/Summer is the time of year that listings increase anyway, as there’s nothing better than showing your property off on a bright and warm sunny day.

However, that increased supply will possibly be balanced by an increased demand from buyers that haven’t been able to get to open homes and have been frustrated for months. Agents have still been able to conduct open homes but only one at a time which means that either they can only 2-3 people in in a 30-minute open or they need to open for a few hours at a time.

The restriction on getting potential buyers in has meant that many agents have just opened for Buyers Agents as they know that they represent motivated buyers, who are pre-approved for finance and have committed financially to hiring a professional to represent them. This has been frustrating for Joe Public and I think it’s this group of buyers that will lead the charge over the next few months alongside the professional buyers.

It’s also been announced that our international borders are starting to open, even before some of our interstate borders, which doesn’t make a lot of sense. However, what this means for our property markets is that there could be even more demand from expats who can finally return and from wealthy overseas immigrants that see Australia as a safe haven.

I’ve always said that there’s more than one property market and ultimately no one knows what the future holds, but I firmly believe that the fundamentals are still there.

APRA have just announced that banks will increase their serviceability rates which will decrease many buyers budgets and there’s always talk of interest rates rising. However, we do have a shortage of properties in many areas in Australia, there are plenty of people with money in their pocket, banks are still lending and there’s confidence that the market will be more expensive in 5 or 10 years.

Whilst the market is still rising, today’s prices will look cheap in years to come.

This article was originally supplied to Century 21.

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