By Betty Lam (Head of Investments and Partnerships)
1. Government and Banks remain committed to being accommodative.
Both Government and banking institutions have worked to ensure Australian’s biggest portion of wealth is preserved. Through accommodative and protective measures such as the extension of mortgage freezes by banks, record low interest rates and the radical revision of stamp duty and land tax. It is clear that there is a common goal to ensure current property owners continue to be supported and home buyers are also well incentivized.
2. Record breaking household savings.
Australia’s household savings rate has hit a historic high as a result of lowered social spending combined with future proofing measures. According to CBA, household savings have witnessed a jump in the past six months of 15.3% higher, year on year. With greater job security amongst well paying roles, it is likely this will translate to good news for more premium suburbs.
3. Job losses are heavily concentrated to renters.
Unemployment has been primarily concentrated to younger people, specifically travel, hospitality and education industries. The rise in youth unemployment has directly impacted a drop in rental price.
4. Not all properties and suburbs are created equal.
Suburbs which have high rental density or are located near universities account for a bulk of rental price drop and increase in listings.
5. First mover advantage
Despite international second and third wave, Australia has remained largely immune. Australia is considered one of the first-mover nations and as a result, parts of the economy are opened and thriving. Home marker, mining and technology have seen a surge in demand. Mining focused areas in Western Australia and Queensland have seen consistent property growth since March 2020.
AFR 3 December 2020
AFR 13 November 2020
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