After putting their plans on hold during the 2020 pandemic, Australian property buyers are cashed up and out in force, according to buyers’ agent Kate Hill of Adviseable.
The property market didn’t take the massive hit many thought it would in 2020 – indeed, prices rose in most locations nationwide – and Hill says Australians are now ready to get out and make life-changing decisions.
For many that means buying a home in a new location or buying an investment property.
Speaking on a webinar hosted by hotspotting.com.au, Hill says those who kept working during the pandemic saved money while working from home, travelling less and spending less on entertainment. Many view property as a safe place to invest that accumulated cash.
“It’s a very stable asset class, much more than the share market,” she says. “When you look at that share market drop back in March 2020, that doesn’t happen to property overnight the way it does with shares.”
Hill says many Australians are now seeking a work-life balance and that is contributing to a surge in demand in regional centres and in the smaller capital cities – although she cautions buyers to not get too caught up in the frenzy and to do their research first.
She says cities such as Perth have some good options for investors with transaction levels now on the rise in many suburbs, with prices now starting to respond.
Vacancy rates are at record lows below 1% and there is a shortage of rental properties, leading to demand from tenants and upward pressure on rents.
“There are fewer properties listed for rent right now than at the same time last year and that’s led to an increase of about $25 a week to the medium rent in the last 12 months,” she says.
“That doesn’t mean the market isn’t without its risks. But those affordable first-homeowner areas are doing really, really well.”
Affordable areas of Perth include the municipalities of Wanneroo, Joondalup, Gosnells, Armadale, Kwinana and Rockingham.
“Those are the markets that are moving at the moment,” Hill says. ““The issue most buyers are facing is there just isn’t enough quality stock yet. I think it’s coming, but it’s not there yet.”
Hill says the important thing for buyers looking in capital cities like Perth and Adelaide is to avoid drifting outside the metro area.
She wouldn’t recommend the Gold Coast where the economy is dominated by one industry, tourism, and prefers the Sunshine Coast as a more rounded and diverse growth economy.
“The Sunshine Coast has something that many regional areas don’t and that is job opportunities in very diverse areas of the economy,” she says.
“It attracts people from Melbourne and from Sydney for that very reason. When you think about why people move, they’re obviously seeking a lifestyle change, they’re looking for affordable property prices and they’re looking at how they’ll earn an income. The Sunshine Coast offers all of those things.”
Hill also suggests Adelaide, which she calls an underrated underdog, with the City of Marion as a favoured choice.
“What I love particularly about this market is the lack of large-scale residential development, because there’s nowhere for it to go.”
Hill says Western Sydney and Penrith in particular is one of the most compelling areas in Australia to buy right now as it has capital growth potential that is hard to beat.
She doesn’t think investors who do their research need fear a crash or major correction in the Australian property market any time soon.
“I just don’t see it crashing,” she says. “I think it will eventually return to what we would see as a new normal.”