Buyer Demand Continues to Place Upward Pressure on The Coasts Property Prices
With average mortgage costs falling since the COVID pandemic began, many people are now finding it more affordable to buy than rent however, this very much depends on the location you live and the style of property you wish to purchase. According to the RBA, the average interest rate on a home loan in Australia has fallen to 2.4% from 3.21% back in February 2020.
Many reasons are being attributed to the COVID property boom, and one of them is the reduction of the cash rate to 0.1%. This has meant in many areas people have found it more affordable to put weekly rent money towards a mortgage. What the CoreLogic study discovered however is that the scenario very much depends on the property location. For example, 60.1% of properties in regional areas are more affordable to buy than rent compared to the combined capital cities, in which only 26% of properties are considered more affordable to buy than to rent.
On top of low interest rates government incentives that were used to help keep the economy afloat certainly had a big role to play. This encouraged more people to enter the property market. Also, with COVID lockdowns travel was restricted, tourism was put to a halt and many other areas where we typically spend our hard-earned dosh, gave us larger cash savings. Many of us now had more money to put towards other things including the purchase of a property. And the story continues…
International migration has essentially come to a halt. This often means lower buyer demand however buyer demand has increased even though migration has stopped. What it has meant is that many inner-city dwellings became vacant as that demand from international students and workers can no longer support it. This has caused a rental decline in units within Melbourne and Sydney and many investors looking for other property alternatives for their investments. i.e. housing in regional areas.
Although interstate migration is massive right now, it doesn’t seem to be putting any downward pressure on the massive price hikes in the capital cities. Sydney and Melbourne have been consistently producing record property prices. Sydney alone has recorded a year-to-date increase of 15.8% with the new median house price sitting around $1.1 million. Sydney is now claimed to be the world’s leading city with luxury house price growth. Realestate.com.au found in June almost 39% of all searches nationally were for properties listed for at least $1 million. Is this the new norm for property prices in Australia?
With travel limited more Aussies are spending their money on property in Australia rather than buying investments abroad. They are also choosing to move to areas that provide a higher quality of lifestyle rather than staying in the cities with work from home becoming a very new reality for many. And hey, what a better place for lifestyle than the Sunshine Coast. We expect to see continued price growth here over the next 6 months as cashed-up buyers choose to make the Sunny Coast their new home.