August Wrap Up 2021

Greetings from Scoutable and welcome to our August Wrap Up.
 
I hope you are well. Our thoughts go out to everyone in our community who are in lockdown. We hope you are staying safe. 

The strong performance of the property market over 2021 (to date) was not aligned with any forecasts from industry experts. The key factors attributing to the strength of the market are; access to credit (low interest rates), limited supply and an increased demand. The demand is partly fuelled by Australians spending more time at home, thus boosting their desire to improve and/or change their surroundings. 

Interestingly, KPMG Economics released a report on 12th July 2021 "The Impact of COVID-19 on Australia's Residential Property market" examining short term predictions and the longer-term scenarios of the post-COVID-19 world.

Key findings: - 

  • House prices in most capital cities were expected to enter a cyclical upswing at the start of 2020.

  • The onset of the COVID-19 pandemic disrupted this cyclical upswing with house prices contracting in all capital cities except Canberra during the June quarter 2020.

  • Government policy responses alleviated uncertainty regarding the direct and indirect impacts of COVID-19 on the property market. This, combined with the material decline in mortgage interest rates, has seen property prices rise dramatically in the past 6 to 9 months.

  • The rises in residential property prices have been greater than we estimate would have occurred in the counterfactual no-COVID-19 scenario.

  • It appears the short-term positive factors of lower mortgage interest rates have swamped the longer-term negative factors of lower population and price disequilibrium during this recent price spike.

  • However, residential property price growth is expected to temper over the next 2 to 3 years as lower population growth, reversion back to equilibrium and higher mortgage lending rates weigh on property prices.

  • Notwithstanding this moderating property price growth during 2022 and 2023, KPMG’s analysis shows that house prices are expected to be between 4 percent and 12 percent higher and unit values are expected to be between 0 percent and 13 percent higher than would have been the case in the absence of COVID-19.

If you would like to discuss the property market further, please get in touch.


Until next month,

Kellie Landrey | Principal Buyers Agent

IN THE NEWS

TENANTS VICTORIA PUSHES TO REINSTATE A MORATORIUM ON EVICTIONS
https://www.realestate.com.au/news/tenants-victoria-pushes-to-reinstate-a-moratorium-on-evictions/

HOLOCAUST SURVIVOR'S RELATIVES $37M+ RICHER AFTER NORTH BONDI DULPEX AND APARTMENT BLOCK SALE
https://www.news.com.au/finance/real-estate/holocaust-survivors-relatives-37m-richer-after-north-bondi-duplex-and-apartment-block-sale/news-story/522f4c8dca06c0d454778dace24acb42

ONE OF AUSTRALIA'S MOST POPULAR AND LUCRATIVE AIRBNB HOUSES HITS THE MARKET FOR $1.8 MILLION-PLUS
https://www.domain.com.au/news/one-of-the-most-popular-and-lucrative-airbnb-home-in-noosa-hits-the-market-for-1-8-million-plus-1084081/

PROPERTY OF THE MONTH

11 Scholey Street, Mayfield (Newcastle)

Newcastle is located approximately 170km north of Sydney and has recently become a popular investment location. According to QBE Australian Housing Outlook 2019 - 2022, the area has performed well over the past five years to June 2018, with an average price growth of 8.1% per annum. However, it wasn't always this way. For a long time, Newcastle was one of the roughest places in NSW. It was a coal port, full of sailors, miners and a city based on steel and industry. The recession of the early 90s hit the city hard, as did the closure of the BHP steelworks, the largest employer in the area.

Newcastle has the three key features which underpin growth - an airport, university and a large hospital. The area also boasts character filled dwellings and neighbouthoods, along with many beaches, recreational and retail facilities.

The property of the month is situated at 11 Scholey Street, Mayfield, 3km to the Newcastle Interchange and 4.5km to the University of Newcastle. The property is on 417sqm of land, providing three bedrooms, two bathrooms, open plan kitchen / living / dining, garden and parking for two cars. The property sold for $1,060,000 on the 19th August.

If you'd like to know more about this property or any others, please get in touch.