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
Property prices boosted by housing policies: RBA
The central bank has outlined the “pervasive” impact that policy has on property. ...Read more
Property
Labor’s ‘Help to Buy’ scheme not without its risks
With Anthony Albanese sworn in as Australia’s 31st PM, home buyers are excited at the prospect of accessing the new ‘Help to Buy’ scheme, but a property expert has warned that the risks may be g...Read more
Property
Australia's housing market is entering a ‘broad-based correction phase’
Westpac believes the housing market downturn is now underway. ...Read more
Property
ANZ now expects house prices will end the year lower
With higher interest rates on the horizon, the bank is forecasting larger house price declines than previously expected. ...Read more
Property
Which capital cities are most attractive to property investors?
A new survey has suggested that investor attention is shifting away from Australia’s two largest capital cities. ...Read more
Property
Market uncertainty fails to discourage foreign property investors
While interest from foreign investors in Australian property has remained strong, HLB Mann Judd warned that tax increases could see demand shift to other markets. ...Read more
Property
Regional renters forced to spend more of their income than ever before
Renters in regional areas are spending nearly as much on rent as home owners are spending on mortgage repayments. ...Read more
Property
Aussie home buyers now need to save for over 11 years for a deposit
Since early 2020, the time needed to save for a deposit has increased by more than two years. ...Read more
Wrapping up an eventful 2021
Listen now
What Omicron means for property, and are units right for first-time buyers? What is equity crowdfunding? Are industry super funds tapping into member funds to save their skins?
Listen now
Will housing affordability improve in 2022? Will buy now, pay later become the norm? Why are Aussies staying in failing super products?
Listen now
Who really benefits from crypto ETFs? How will the RBA respond to rising inflation? Could a mandate help address unpaid super?
Listen now
Property
Property prices boosted by housing policies: RBA
The central bank has outlined the “pervasive” impact that policy has on property. ...Read more
Property
Labor’s ‘Help to Buy’ scheme not without its risks
With Anthony Albanese sworn in as Australia’s 31st PM, home buyers are excited at the prospect of accessing the new ‘Help to Buy’ scheme, but a property expert has warned that the risks may be g...Read more
Property
Australia's housing market is entering a ‘broad-based correction phase’
Westpac believes the housing market downturn is now underway. ...Read more
Property
ANZ now expects house prices will end the year lower
With higher interest rates on the horizon, the bank is forecasting larger house price declines than previously expected. ...Read more
Property
Which capital cities are most attractive to property investors?
A new survey has suggested that investor attention is shifting away from Australia’s two largest capital cities. ...Read more
Property
Market uncertainty fails to discourage foreign property investors
While interest from foreign investors in Australian property has remained strong, HLB Mann Judd warned that tax increases could see demand shift to other markets. ...Read more
Property
Regional renters forced to spend more of their income than ever before
Renters in regional areas are spending nearly as much on rent as home owners are spending on mortgage repayments. ...Read more
Property
Aussie home buyers now need to save for over 11 years for a deposit
Since early 2020, the time needed to save for a deposit has increased by more than two years. ...Read more
