Australian home values finished 3.0% higher in 2020 than the previous year with regional housing values rising by 6.9%, a double result that augurs well for bricks and mortar.
According to CoreLogic research, Darwin produced the best result of all capital cities with growth of 9% in 2020, with Canberra next best with an annual average gain of 7.5%. Adelaide (5.9%) and Brisbane with a yearly growth of 3.6% also enjoyed a strong 2020. Meanwhile, Perth rose by 1.9% with Melbourne (1.5%) and Sydney (1.3%), producing some growth despite being hardest hit by COVID-19 restrictions.
Angus Raine, Executive Chairman, Raine & Horne said the terrific performance of Australian real estate over the last 12 months bodes well for 2021. “All the property planets are aligned with the economy improving, record low-interest rates, massive buyer demand and a shortage of listings. In combination these factors are set to ensure Australian real estate values will grow by 5-8% in 2021,” Angus says.
“Moreover, plenty of properties are selling even before they hit the market, so days on market are incredibly low.
“Returns could be even higher in regional markets where city buyers can still find excellent real estate affordability and strong rental yields if they are seeking an investment asset.”
Leading economist, Shane Oliver from AMP Capital agreed, “Australian home prices are likely to continue to be boosted through 2021 by record low mortgage rates, government home buyer incentives, with the recovery in the economy expected to offset the phasing down of income support measures and bank payment holidays.”
As for market front runner, Darwin, Glenn Grantham, General Manager, Raine & Horne Darwin predicts the northern capital will produce even better returns in 2021. “We have such small volumes in Darwin compared to the other capitals. So, our market reacts faster to major changes, whether it’s a multibillion-dollar infrastructure announcement or the realisation that our government kept the lid on COVID faster than other jurisdictions.”
He continued, “Since our borders reopened in July, we’ve had at least 10,000 people move to the Northern Territory, which is a significant increase when the total population is around 250,000. Moreover, these people need a roof over their heads, putting pressure on our sales markets and our rental markets.”
Glenn is adamant the Darwin market in 2021 will outperform last year’s growth trajectory. “The 9% we achieved in 2020 was patchy as some areas in Darwin didn’t record much growth.
“This year, improved returns will be produced across Darwin and consequently, 2020’s growth result will be conservative compared to what we expect for the next 12 months.
“I would not be surprised if the Darwin property market records growth between 10-15% and even higher in 2021.”