Happy new year! We hope that you and your family enjoyed some quality time this Christmas and New Year.
Welcome to our first newsletter for 2021. Despite all the challenges caused by the pandemic, the property market finished the year on a strong note in 2020. Read on to find out how the property market performed near you and what’s in store for 2021.
Interest rate news
Last year, the cash rate decreased three times due to the COVID-19 pandemic. The RBA didn’t meet this month, extending the seriously low official cash rate of 0.10 per cent until at least the next meeting on 2 February.
The RBA Board said that low rates will likely stay for a while in order to aid the economy’s recovery by:
lowering financing costs for borrowers
contributing to a lower exchange rate than otherwise
supporting asset prices and balance sheets
and the Term Funding Facility (TFF) supporting the supply of credit to businesses.
With this, we see lenders offering competitive home loan interest rates. Speak to us if you wish to review your options and compare home loans that would suit your current financial situation.
Home value movements
Summer is in full swing as the Australian housing market gained momentum through the end of 2020 – annual home values finished the year 3.0 per cent higher nationally. All capital cities recorded a higher rate of capital gain except Melbourne in 2020. Darwin saw the highest annual capital gain at +8.99 per cent dwelling value increase. Regional housing market conditions surged in 2020 as remote working opportunities, lifestyle properties and lower density housing options became more popular.
Housing values continued the recovery trend on its third month, recording a 1.0 per cent rise in all capital cities and regional areas in December. The biggest jump was seen in Darwin where values increased by 2.34 per cent. Dwelling values increased by more than 1.0 per cent in Adelaide (1.10 per cent), Perth (1.06 per cent) and Brisbane (1.06 per cent). According to CoreLogic’s Head of Research, Tim Lawless, the rebound in housing market activity and dwelling values is not a surprise given the rapid and substantial monetary and fiscal response from the Government and policy makers.
CoreLogic data shows that inventory levels remain low throughout 2020 despite of the increase in the number of new listings in spring and early summer. This means that there are more active buyers than new listings being added to the market. “Despite new listing numbers being consistently lower relative to their 2019 levels, the estimated number of home sales were almost 8 per cent higher though 2020 compared with the 2019 calendar year. This imbalance between effective supply and demand is another factor that has supported a rise in housing prices as a sense of urgency returned to the market with home buyers outnumbering sellers, most areas around the country represent a seller’s market.” Mr. Lawless said. The data also shows that homes are selling faster and vendors are discounting their prices less.
Monthly home value change
Home values change 2019 to 2020
▼ – 1.33%
* Monthly Home Values figures as of 31 December, 2020 * Australian auction results, clearance rates and recent sales for the week ending 10 January, 2021. * The clearance rate is preliminary and current as at 09:54 pm ADST, 11 January, 2021.
What’s in store for 2021?
2020 has experienced extremes due to COVID-19 but the property market showed resilience through the economic downfall, ending the year with annual home sales about 8 per cent higher than a year ago.
With the RBA keeping the low interest rates for a while in order to aid the economy’s recovery, this is good news for new home buyers, property investors and current home owners alike. 2021 will be a great time to focus on paying down your mortgage whilst interest rates remain low. If you’ve had your home loan for a while, now is the time to talk to us about a home loan health check.
Remember, we’re here to help you to manage your mortgage and support you to achieve your property goals in 2021. Please give us a call to chat about your plans. We’d love to hear from you!
The information provided is general information only and has been prepared without taking into account your objectives, financial situation or needs. We recommend that you consider whether it is appropriate for your circumstances. Your full financial situation will need to be reviewed prior to acceptance of any offer or product. This article does not constitute legal, tax or financial advice and you should always seek professional advice in relation to your individual circumstances. Subject to lenders terms and conditions, fees and charges and eligibility criteria apply.