Invest
Post-recession pattern: How prices will rise in the next 5 years
Real estate has proven its resilience once again as prices rise over the year and forecasts point to further strengthening, the Property Investment Professionals of Australia said.
Post-recession pattern: How prices will rise in the next 5 years
Real estate has proven its resilience once again as prices rise over the year and forecasts point to further strengthening, the Property Investment Professionals of Australia said.
The CoreLogic Home Value Index for November showed that national dwelling values were up 0.8 per cent over the month, with every capital city, apart from Melbourne, posting positive results and regional areas performing even more strongly.
According to PIPA chairman Peter Koulizos, the results were in stark contrast to some of the doom-and-gloom property price forecasts at the start of the pandemic.
“Big banks and some property commentators were predicting property price falls of anywhere from 10 to 30 per cent. At the same time, PIPA produced research to show that house prices had increased by as much as 100 per cent in the five years after the most recent recessions.
“For some reason, even though our analysis looked at every downturn or recession over the past 50 years, plenty of people were still expecting property prices to fall off a cliff this time around,” Mr Koulizos said.
PIPA’s data found that, five years after each of the recessions or economic downturns over the said 50-year period, capital city house prices often increased significantly.
“Some locations performed better than others, mostly likely due to local economic factors after each period.”
Following the most recent 2009 downturn, for instance, Sydney, Melbourne and Darwin posted double-digit growths five years later in 2014, with prices increasing by 39.7 per cent, 18.5 per cent and 16.6 per cent, respectively.
SQM Research has also now forecast strong annual growth in most capital cities in 2021, with annual dwelling price growth of up to 12 per cent predicted in some locations.
According to Mr Koulizos, government stimulus measures and record-low interest rates were always going to help protect property prices, just as they did several times in past economic downturns.
“It has always been a priority to protect the wealth of everyday Australians whose biggest asset is usually their homes,” he said.
“Lowering interest rates to support home ownership but also to encourage more spending generally has long been a successful policy during economic downturns, coupled with other stimulus measures.”
The positive price hike in November supported the results of the 2020 PIPA Annual Investor Sentiment Survey in August, which found that nearly 75 per cent of investors expected property prices to be the same or better in their state or territory in 12 months’ time.
The survey also indicated that 71 per cent of investors were less likely to sell a property over the next 12 months because of the pandemic, “which is no doubt part of the reason for the continued low supply of listings in some locations around the nation”, Mr Koulizos concluded.
Property
Why it now costs 130% more to service a mortgage than 3 decades ago
The lifetime cost of owning a home has increased by over 130 per cent in just three decades, new research has revealed. ...Read more
Property
Using the 30/30/3 rule for home buying during uncertain times
Thinking of buying a home? Uncertain economic times may have you double guessing your purchase, but the 30/30/3 rule can help you make this a reality. ...Read more
Property
Rental yields reach decade high, but not all markets move at the same pace
Changing consumer preferences towards lifestyle destinations and a lack of supply have led to record national price growth, albeit price fluctuations vary region-to-region, fresh figures show. ...Read more
Property
What younger Australians are getting wrong about home loans
As young Australians look to fight the odds and take their first step onto the property ladder, more and more are making easy mistakes. ...Read more
Property
More than 1 in 3 Aussie properties are cheaper to buy than rent
Having a mortgage is even more likely to be cheaper than renting than it was pre-pandemic, new research has revealed. ...Read more
Property
How will the moratorium on evictions impact landlords and tenants?
The NSW government has announced a 60-day moratorium on evictions, with landlords gifted incentives to reduce the burden on COVID-19-affected tenants. ...Read more
Property
Young renters cry out against ‘lack of respect’ in rental market
Young Australians have expressed dismay over the perceived discrimination within the rental market as the wealth divide forces them into long-term renting. ...Read more
Property
Note investing: A way into the property market for younger Australians?
As the traditional route into the housing market becomes more difficult, could unorthodox alternatives like note investing bridge the gap? ...Read more
Do lockdowns boost property prices? Are short-sellers levelling the playing field? Did you lodge your tax returns early?
Listen now
Will lockdowns halt the housing boom? Is the metaverse taking over? And the cons of lodging your tax returns early
Listen now
Are you being priced out of the market? Have you got the Tuesday blues? And are you ready for the upcoming super changes?
Listen now
Are property prices set to crash? Should you jump on board the fintok craze? And how to prepare for this tax time
Listen now
Property
Why it now costs 130% more to service a mortgage than 3 decades ago
The lifetime cost of owning a home has increased by over 130 per cent in just three decades, new research has revealed. ...Read more
Property
Using the 30/30/3 rule for home buying during uncertain times
Thinking of buying a home? Uncertain economic times may have you double guessing your purchase, but the 30/30/3 rule can help you make this a reality. ...Read more
Property
Rental yields reach decade high, but not all markets move at the same pace
Changing consumer preferences towards lifestyle destinations and a lack of supply have led to record national price growth, albeit price fluctuations vary region-to-region, fresh figures show. ...Read more
Property
What younger Australians are getting wrong about home loans
As young Australians look to fight the odds and take their first step onto the property ladder, more and more are making easy mistakes. ...Read more
Property
More than 1 in 3 Aussie properties are cheaper to buy than rent
Having a mortgage is even more likely to be cheaper than renting than it was pre-pandemic, new research has revealed. ...Read more
Property
How will the moratorium on evictions impact landlords and tenants?
The NSW government has announced a 60-day moratorium on evictions, with landlords gifted incentives to reduce the burden on COVID-19-affected tenants. ...Read more
Property
Young renters cry out against ‘lack of respect’ in rental market
Young Australians have expressed dismay over the perceived discrimination within the rental market as the wealth divide forces them into long-term renting. ...Read more
Property
Note investing: A way into the property market for younger Australians?
As the traditional route into the housing market becomes more difficult, could unorthodox alternatives like note investing bridge the gap? ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
