Our property market has led Australia’s economic recovery, but how?
Property isn’t just something that snags your interest at the family barbeque - it’s served up as vital to our economy!
That it is important to so many Aussies shouldn't surprise, not given the millions of dollars - and words - poured into the real estate market each week.
And the buyers keep coming, even during a pandemic, which is why property data experts CoreLogic say that the 2021 market “upswing”, accompanied by a rapid increase in home loan credit and highly elevated sales volumes, has helped our economy stay afloat.
A quick look at the property numbers
The main point is that prices have climbed - not dropped - in the 12 months to November of this year. Specifically, national housing values rose 22% (as an overall average), says CoreLogic, with our major cities leading the charge. Under the circumstances that seems an extraordinary result.
And it wasn’t just prices that went up. Over the same period, there were an estimated 614,635 dwelling sales across the country, which is the highest annual sales volume since December 2003. How can this be?
If you stop and think about it, it’s hard to compute, especially when so much of the time people were in lockdown, half-lockdown or in all around economic half-heartedness. What exactly has been going on?
The seemingly always 'optimistic' housing market has been supported by a combination of factors, including low interest rates and relatively low levels of available homes. Another major factor in all this has been Aussies ability to save money during restrictive times, which may account for good buyer numbers when doors were opened.
CoreLogic’s Head of Research, Eliza Owen tells Mozo that the jump in sales volumes was in part in spite of lockdowns - and in part because of lockdowns.
“Over the past two years, lockdown conditions saw the RBA respond with record-low monetary policy targets, which has fuelled more demand for housing because of low debt costs. So this has contributed to more purchases,” she says. “This was particularly amplified in 2021 because it was only toward the end of 2020 that the cash rate dropped to its record low target of 0.1%.”
Then there’s our overall positive sentiment, which can ebb and flow but always feels unwavering when it comes to real estate.
“The relative resilience of housing activity through 2021 lockdowns could also be down to greater buoyancy in consumer sentiment through lockdown periods, where it remained above 100 all through lockdowns between June and October," Owen says.
“I think people became used to lockdowns, saw that
the housing market wasn’t really affected by them price wise, and became less cautious about making purchases during them. It wasn’t always sight unseen either. Even through the strictest restrictions in Sydney over 2021, physical inspection of properties were always permitted if you were buying.”
Owen adds that any market activity that was disrupted by lockdowns was simply moved to the post-restriction world, so there was also an element of "catch up" in sale activity after lockdown.
So, there you have it, folks. Not even a pandemic and all its associated restrictions and rules can quell the passion for property in Australia it seems.
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