A combination of well-directed government stimulus, lower interest rates, employment security has set many Australian real estate markets on course for healthy spring market conditions, according to leading property group Raine & Horne.
The Raine & Horne Group has sold 1,100 properties around Australia since the middle of July from 1-hectare blocks of land in Mandurah in south-western WA worth $287,000 to stunning multimillion-dollar beachside homes in Sydney’s exclusive Eastern Suburbs.
Angus Raine Executive Chairman of Raine & Horne said two-thirds of Australia’s national housing market was not affected by the pandemic, with Melbourne and, to a lesser extent, Sydney the exceptions.
“Most of our capitals and major regional growth centres have weathered the challenges since March due to government stimulus support such as HomeBuilder and record low-interest rates, while the low sales volume environment of the last five years is also continuing to prop up markets.”
The HomeBuilder grant provides eligible owner-occupiers including first home buyers with $25,000 to build a new home or substantially renovate an existing home.
“Buyers also recognise our current historic low-interest rates are with us for a few years at least and this confidence[i] is resulting in more home loan applications,” said Mr Raine.
“Accordingly, we expect this pent-up buyer demand could hit a tipping point this spring making the run-up to Christmas a fantastic opportunity for vendors considering a sale.”
Job security drives demand for Lower North Shore homes
On Sydney’s prestigious Lower North Shore, Stuart Bourne, Managing Director of Raine & Horne Lane Cove said buyers and sellers are seeing good opportunities to upsize in the current market.
“There are plenty of buyers keen to purchase as they are working in industries that are doing well and their job prospects are good.”
Mr Bourne continued, “We are seeing plenty of clients working in health, IT, risk management, and banking who see the current market as an opportunity to secure a quality, well-located home on Sydney’s Lower North Shore.
“On the supply-side, we expect stock levels to increase as we shift into the typical spring market but are expecting activity to pick up earlier than in previous years.”
Adelaide vendors to benefit from price growth and buyer confidence
In inner Adelaide, the local property market is bouncing back strongly since the temporary lull in April and May, according to Constantine Pappas, Director of Raine & Horne Unley.
“The market is in a really good place right now, and properties within five kilometres of the Adelaide CBD or the beach are selling for prices above expectations,” said Mr Pappas.
“We’ve been able to keep a lid on COVID in Adelaide, and this confidence is encouraging more buyers to make a move.
“This confidence, combined with low stock levels, is contributing to price pressures which have helped push values in inner rim suburbs up by as much as 5% since the beginning of the year.”
To illustrate, a stunning, modern three-bedroom property at 19 Dawson Street Fullarton sold under the hammer recently for a tick over $670,000.
Mr Pappas said, “This auction attracted nine registered bidders and 60 groups to open for inspections over the course of the three-week campaign before the auction.
“We received five offers prior to auction and the property sold for almost $70,000 above expectations.”
He continued, “With price growth, low stock levels, and buyer confidence this spring will be a brilliant time for those vendors with properties in inner Adelaide suburbs to make a move to sell.”
In southwestern WA, Peter Vetten, Principal of Raine & Horne Mandurah says Mandurah was impacted in March and April but then government incentives such as HomeBuilder helped to steady the local property market.
“We are back to normal sales levels now with the $25,000 grant a big factor on attracting first-time buyers and even fly in/flyout (FIFO) workers to Mandurah,” Mr Vetten said.
“In June, we had a fair bit of land listed for sale so when the Federal Government announced Homebuilder and the Western Australian Government-backed that with an additional $20,000 Building Bonus Grants[i], sales in Mandurah took off.”
For example, 1-hectare lifestyle blocks in a new land release at 539 Readheads Road, North Dandalup have been selling like hotcakes, Mr Vetten revealed.
“These lots are selling from $287,000 and are attracting first-time buyers and FIFO workers who are once again earning good money in the mines in northern Western Australia.
“Buyers also realise that there the HomeBuilder and the WA government’s Building Bonus Grants have 31 December deadlines, so they are making hay while these grants are available.”