Australia’s housing market recorded respectable growth over 2020 and with limited stock and strong demand, plus the possibility of an August election, 2021 should see further price increases, according to REIA President Adrian Kelly.
Mr Kelly said the winding back of JobKeeper and JobSeeker may see temporary issues for tenants in some capital cities, but the trend to relocate to the regional areas currently being experienced is likely to gain further momentum.
“Traditionally there is a reduction in the number of house sales over the holiday period due to buyers going away for the festive period, but due to the current restrictions people are taking advantage of the market conditions whilst they are unable to travel and looking to buy while they can,” he said.
“Government stimulus measures and continued low interest rates have been in part responsible for the resilient demand for residential property.
“Overall, the real estate industry looks forward to a positive year for the Australian property market with the promise of an Australian COVID-19 vaccination program allowing life to resume to a new normal.”
Mr Kelly said with the possibility of a Federal election being called as early as August 2021, it was critical policy makers make measured commitments for property policy for all players in the real estate industry – from first home buyers to investors.
“In May just prior to the 2019 election, house sales were the lowest in two decades across Australia which was largely attributed to election commitments from the Federal Opposition to abolish negative gearing and Capital Gains Tax (CGT) in their current form.
“Given the major role investors played and continue to play in providing housing over the pandemic, it is critical that in the run into the election that policies from all sides of politics work for all players in real estate.
“Even though growth in new dwelling investment is unlikely in the 2020/21 fiscal year, given the lags between building approvals and construction activity, the forecast for dwelling investment has been revised from -4 per cent in the Pre-election Economic and Fiscal Outlook to -3.5 per cent in MYEFO,” he said.