By Betty Lam (Head of Investments and Partnerships)
Almost 12 months ago, Australian analysts incorrectly called falls of up to 30% to local property at the onset of lockdown in 2020. What these analysts failed to predict, was the trend of Australians who now semi-permanently work from home and the increasing appetite to own real estate as a result.
The demand and desire to make own a piece of the earth is an Australian-birth-right. However, Covid and the flexibilities of remote working expedited the process. The first half of 2020 saw buyers who were predominately upgraders or first home owners from mid-2020 the narrative changed; property investors began to step off the sidelines to participate in the buying frenzy.
FOMO behaviour amongst buyers has been intensified as a result of stock shortages, a combination of lockdown restrictions and seller uncertainly. The Australian eastern states of Victoria and NSW experienced impressive Auction clearance rates of 91% and 90% respectively on the weekend of February 13th, with many properties settling ahead scheduled auction dates.
What does this mean for housing valuations? Some of the major banking outlets have predicted house valuations will see a bolster of between 14-20% over the next two years. Housing prices will heavily depend on the demand for dwelling, this will be directly correlated to lending affordability and employment. As long as we see the RBA continuing to accommodate cheaper lending with little hurdles, than housing valuations will likely continue to see upward support.
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