After months of economic and property price drops due to lockdowns and restrictions, we are finally in recovery mode.
CoreLogic reports a 0.8% increase in dwelling values following a 2.1% drop between April and September. This is the second consecutive monthly rise recorded this year.
“The national home value index is still seven tenths of a per cent below the level recorded in March, but if housing values continue to rise at the current pace we could see a recovery from the COVID downturn as early as January or February next year. The recovery in Melbourne, where home values remain 5% below their recent peak, will take longer.” Tim Lawless, CoreLogic’s Head of Research, further explained.
There are a number of factors contributing to this recovery.
Victoria lockdown lifted
After almost an entire month, Victoria restrictions are finally lifted. Buyers and sellers in the Property Market are returning to normal operations with day-to-day and retail trade bouncing back.
Availability of a vaccine
By March next year, Australia is expected to receive 30 million doses of the Oxford vaccine. Their researcher recently reported that the vaccine showed 90% effectivity. AstraZeneca, Oxford’s manufacturer are already moving to get it approved by Australian regulators. While it will take some time before the entire world population gets vaccinated, it brings hope for things to return to normal. Global activity and travelling further drive growth in the economy and the property market.
Certainty of US election
The US is the worlds biggest economy and is one of the major strategic partners of Australia. On January the 20th, 2021, president-elect Joe Biden will be inaugurated as the 46th president of the United States. Despite the country having the largest number of COVID cases, the certainty of the US election eleviates some of our worries.
Cut in the Interest Rate
A 0.1% cut in the cash rate was implemented by the Reserve Bank of Australia at the start of the month. Lower interest rates, lower mortgage rates and more flexible lending rules contributed to the rise in house prices.
To move Australia out of recession and boost activity in the property market, the Victoria and NSW governments amended their stamp duty. In Victoria, stamp duty relief will be given to buyers purchasing properties valued up to $1 million in a bid. In NSW, buyers can opt to pay stamp duty upfront or pay smaller annual property tax.
Free trade agreement
In November, Australia joined the world’s largest trade deal. The Regional Comprehensive Economic Partnership covers 30% of the global economy with countries like China, Japan, South Korea, New Zealand, Indonesia, Vietnam and other ASEAN members partnering to boost economic activity.
Australia is technically out of recession. When the September 2020 national accounts are released we can officially affirm this statement. However, all indicators are pointing to economic growth this quarter. Not everything is back to normal, but property prices are expected to benefit from this economic recovery.
Real Estate agencies have moved online and some even offshore in the wake of the crisis. This trend is expected to last even after the world returns to normal.
Many companies have experienced how outsourcing their administrative activities in other parts of the globe allowed their agents and property managers more time to spend with buyers, sellers, landlords and tenants. They’ve seen an improvement in their customer service and have enjoyed lower administrative and transaction costs.
Universal Property Systems is your global real estate partner in providing top of the line customer service, property management assistance, sales and marketing support and finance solutions. We are not here for the short-haul. We are here to provide long-term support and help you make tough decisions so you can reach your business goals.
Our team of professionals are trained in Real Estate specific roles, jargon and applications. Each of our global team members is ready to be embedded in your team anytime you need.
If you wish to move offshore and get to know our team, call us at 1300 855 111 for an obligation free chat or email us at firstname.lastname@example.org.