Episode Details

No one expects 2021 to be the same type of rollercoaster ride as 2020.

And while there's plenty of good news for our economy and our property markets, it's important to remember that considerable uncertainty remains and the extreme dislocation to many businesses over the past year will take time to resolve.

Now the general optimism is well-founded.

We seem to have this virus "thingy" under control, around 90% of the jobs lost during the pandemic have now been restored – and that's a tremendous achievement and our property markets are rebounding.

Australia and the world also stand on the cusp of the biggest vaccination rollout in human history, which will only increase the rising levels of consumer and business confidence we're experiencing.

Sure, the COVID rollercoaster may be slowing, but we still face a bumpy road to economic recovery and that's what I'm going to discuss in today's show with Pete Wargent as well as giving you five of my predictions for our property markets in 2021.

Then I'll share my mindset message with you.

2021 Property Trends

It seems that everybody has been making predictions for our housing markets for 2021 and they're all extremely positive.

While on the one hand I love to hear this, on the other hand I'm always concerned when everybody thinks the market is going to perform in a particular way as we have seen how wrong consensus opinion has been over the last few years.

So in today's show I share 5 property trends that I think will occur in 2021 and I'm looking forward to Pete Wargent's view on these, plus we'll discuss some economic trends that will influence our property markets.

1. Property demand from home buyers is going to continue to be strong.

One of the leading indicators I watch carefully is finance housing approvals, and these are at record levels suggesting that we will have strong demand from owner occupiers and investors in the first half of this year.

Despite the "recession we made ourselves have", rising unemployment, and many small businesses facing challenges, interest in buying residential property has skyrocketed.

This has come particularly from owner occupiers who have amassed household savings at levels not seen since the mid 1970s, and this is in part because they have not been able to spend their money on vacations or even local entertainment as they normally would.

Now, with borrowing costs lower than they ever have been, the reassurance that interest rates won't rise for at least 3 years and increasing confidence that we've got this virus thing under control, it is likely that buyer demand will remain strong throughout the year.

2. Investors will squeeze out first home buyers

While currently there are many first-time buyers (FHB's) in the market, buoyed by the many incentives being offered to them, I can see demand from first homebuyers fading as property values rise from increasing competition as investors re-enter the market.

You see…typically investors compete for similar properties to FHB's.

3. Property Prices will continue to rise

As always, there are multiple real estate markets around Australia, but in general property values should increase strongly throughout 2021.

However certain segments of the market will still continue to suffer, in particular in the city apartment towers and accommodation around universities. It is unlikely the segments of the market will pick up for some time and the value of these apartments is likely to continue to fall as there just won't be buyers for secondary properties.

At the same time some rental market will remain challenged. In particular the inner-city apartment markets which are reliant on students, tourists (AirBNB) and overseas arrivals.

4. People will pay a premium to be in the right neighbourhood.