FORTITUDE VALLEY, Australia - Jan. 19, 2021 - A return of investors to the market, coupled with a lack of listings is tipped to increase property prices throughout Australia in 2021.
CoreLogic Research Director Tim Lawless predicts property price increases of between 7% and 10% in 2021, with the smaller capital cities tipped to benefit the most.
Mr Lawless and Custodian CEO John Fitzgerald, the author of 7 Steps to Wealth, will discuss property price growth predictions in a webinar on January 20 and January 27.
Brisbane, Adelaide and Perth were most likely to experience the strongest price growth this year.
Mr Lawless said Sydney and Melbourne property price growth is not expected to be at the same level.
"If the COVID pandemic has shown us anything it is that property can be a safe investment, but you need to be careful about what type of property you invest in," Mr Fitzgerald said.
"We recommend investment in land because it appreciates in value. Of course, many investors need to build something on that land to help them pay down their loan, that's why we recommend building a new house in areas of high population growth and with significant amenity and jobs nodes nearby."
Mr Lawless said a lack of listings would continue to drive the property market within the next few months.
"While listings started to lift at the end of 2020, they are still 21 per cent lower than at the same time the previous year," he said.
His predictions are backed by a national survey done on behalf of Custodian which found 19 per cent of people who already owned an investment property planned to buy in 2021, while 6 per cent of respondents had decided they would buy their first investment property in 2021.
It found 22 per cent of investors had put off buying an investment property in 2020 because of COVID.
Mr Lawless said while 2020 had been a volatile year it was more in relation to transaction numbers rather than a drop in property prices.
"The number of properties selling nationally fell 40 per cent in April, but they did start to lift in the second half of 2020," he said.
"Peak to trough values fell only about two per cent nationally and bounced back quite quickly."
Mr Fitzgerald said many people had over-estimated how significantly COVID was going to impact the economy.
Investor numbers were at record lows with only about 24 per cent of mortgage demand coming from investors when normally it would account for a third of loans.
Mr Lawless said investors were motivated by positive cash flow and growing capital gains and that was why smaller cities such as Adelaide and Brisbane would be the focus of demand this year.
https://custodian.com.au/events/
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