According to a recent CoreLogic report, homeowners are more likely to sell their home at a profit than they were before the COVID. 88.1% of properties that changed hands in the September quarter of 2020 sold for a profit, however, loss-making sales in Sydney included Parramatta 18.4%, Strathfield at 18.7% and Ryde at 16.8%.
According to another report, the Domain House Price index released on January 28, the nation’s median detached house price hit a record high of $852,940 in the December quarter. Sydney’s median house price tapped $1,211,488 – a record peak – and Melbourne’s hit $936,073.
A seemingly positive movement for the Sydney properties, despite the steepest decline in population growth in decades due to the international border closures – something that should theoretically reduce demand for housing.
Whilst it’s thought that housing prices usually fall when there’s a recession, the government stimulus and relief last year softened the blow, and overall household income growth has actually increased. Westpac’s chief economist Bill Evans expects a 15% price surge in national prices by 2023 as well, equaling a 7.5% per year price rise. While there may be “some modest downward pressure on prices” in the few months when banks restructure loans for distressed borrowers, Evans thinks ultra-low interest rates, combined with the government’s focus on growing the economy and desire not to over-regulate bank lending, will create a “very, very positive environment for the housing market”.
On another note, the RBA and the prudential regulation authority have announced they are prepared to tighten lending standards if record low-interest rates result in a housing boom. According to RBA modelling, a permanent percentage point reduction in official interest rates can drive up real house prices by up to 30%.
If you would like to take advantage of current market conditions, or if you are thinking of making a move but the lack of available property has got you hesitant, get in contact with us – we have a plan for you.