- Australian home lending is picking up again as both owner-occupiers and investors look to buy, according to the latest ABS figures.
- While the pandemic was expected to hurt property prices, the market has largely proven resillent.
- Nonetheless, buyers have plenty of questions about where the market is going, where to buy and when to buy.
- Visit Business Insider Australia’s homepage for more stories.
The pandemic may have thrown the Australian property market a curveball but there’s no shortage of Australians looking to get into it.
As prices fall moderately in Australia’s largest cities, home lending is actually jumping higher.
According to the latest ABS figures published on Friday, owner-occupier and investor loans both rose 9% in August, with all major states up substantially.
“The latest lending indicators data is encouraging, with households responding strongly to record low interest rates and the various buyer incentives in play,” BIS Oxford Economics principal economist Tim Hibbert said.
While the market is clearly going through a turbulent time, demand for property hasn’t abated.
With that in mind, Business Insider Australia asked buyers agent Lloyd Edge the top questions he’s encountering from Australians looking to invest.
Is now a good time to buy?
Whether prices are going up or down, the question of whether now is the right time to buy is always being asked.
With no one sure of where the market is headed, Edge says it’s better to focus on the question of ‘where’ you intend to buy rather than ‘when’.
“Every investor or buyer should have a specific strategy in place that is unique to their goals. Common goals include wanting to retire, putting children through private school tuition or wanting to go on more holidays,” Edge said.
“This strategy will then inform the location of the property, for example buying in the city or in a regional area. There are many markets in Australia and each one performs differently due to their cycles, so make sure you stay up to date with the latest data, instead of viewing Australia as a whole.”
What are are the best regions to look at?
With prices having jumped considerably in Sydney and Melbourne in recent years, it’s no surprise there’s plenty of interest in regional areas.
Even more so when there have never been more opportunities to work remotely and potentially embark on a ‘tree-change’.
These are Edge’s top regional picks in each state:
- NSW: Mudgee and Orange
- QLD: Caloundra, Palmwoods, Northlakes and Morayfield
- VIC: Mount Pleasant, Bendigo, Geelong, Albury and Ballarat
- WA: Carnarvon
- TAS: Brighton
- SA: Barossa and Claire Valley
Should I still buy close to the city?
Similarly, buyers are curious if inner city locations should remain a top priority. Again, Edge says it depends on your strategy.
“Are you looking to buy for the long term, or for cashflow, or to add value to a property? If you’re looking for an investment, make sure you buy in an area where there is scarcity,” he said, noting COVID-19 has produced an apartment oversupply in city areas at the moment.
“Tenants are looking to outer suburbs and regional areas right now, as they are looking for a home office or backyard due to working from home policies. Whereas, if you’d like to live in a city suburb, you might be able to snap up an affordable property right now.”
What will the market look like in 2021?
This may be the most common question people have right now, and for a good reason. No one can really answer it.
While some economists predicted large price falls at the onset of the pandemic, that hasn’t come to pass.
No one has a crystal ball but certainly, everyone has an opinion.
“Personally, I predict that house values will start to rise again next year, due to a few factors – lower interest rates, it will be easier to obtain finance, and the Government stimulus packages will ease off gradually, not all at once,” Edge said.
“Tourist markets will still get some good growth, but again not all of them. For example, the Gold Coast has a high level of mortgage deferrals at the moment, partly due to border closures and so many people working in tourism,” he said.
“That market will come back but it will always fluctuate, like many. Again, I stress the importance of assessing individual markets.”
Business Insider Emails & Alerts
Site highlights each day to your inbox.