REA Insights Property Outlook Report 2021 tips housing market to continue to soar

Regional Australia and the luxury segment of housing sector have been tipped to be the star performers this year.

Despite the worst economic downturn in Australia since the great depression, house prices have been forecast to rise this year, with the regions set to outperform the rest of the nation and the luxury end of the sector the star performer in the major cities.

REA Insights Property Outlook Report 2021 says Australians have never been wealthier, which was reflected in the “rise and rise” of the luxury property market.

Last year the list of $3m-plus suburbs doubled during the ­pandemic.

“This unique trend of house price growth during a recession did not occur during the global ­financial crisis last decade or the early 1990s recession,” the report says.

“Towards the end of 2020, views per listing on realestate.com.au for homes priced over $10m had increased by 150 per cent compared to prior to the pandemic.

“While the increased demand may be explained by people stuck at home browsing beautiful properties online, median price increases in Australia’s most ­expensive suburbs suggests otherwise.

“In 2021, it is possible that the list of $3m-plus suburbs will again double, primarily because much stronger conditions are expected for the residential market.”

The report found that investors will return to the market and they will focus on regional Australia, which will again outperform the rest of the country.

While views per listing on realestate.com.au jumped 16 per cent in capital cities during the second half of 2020, the increase in regional Australia was 44 per cent.

 

Government initiatives played a key role in the housing sector’s performance last year, with only 71 distressed listings on real­estate.com.au last year, compared to 98 in 2019.

At a state-based level, the ACT continues to lead the charge in terms of growth in views per ­listing. Demand is lagging in ­Victoria, most likely driven by the prolonged lockdown during the measurement period.

Nerida Conisbee, realestate.com.au chief economist and REA Insights Property Outlook Report 2021 author, said many of the themes and momentum they saw towards the end of last year would continue in 2021.

“Sydney is on a fast trajectory for growth with particular strength in outer suburban areas, northern beaches and central coast,” she said.

“Melbourne’s prolonged lockdown has resulted in a slow recovery. The luxury market is rebounding but not as quickly as what we’re seeing elsewhere.

“Brisbane is experiencing strong conditions, as is the Gold Coast and Sunshine Coast. Greater certainty on interstate borders will help population growth and housing demand.”

Ms Conisbee said the Adelaide rental market remained strong, with southern Adelaide to be the top performer in 2021, while Perth was seeing the best conditions since the last mining boom, with the rental market particularly hot.

She said Hobart, which faced some challenges early in the pandemic, powered through to achieve one of the best results ­nationally, and house prices continued to rise.

Interest in Australian property offshore climbed last year, with searches from the top seven most active countries increasing 13 per cent year on year.

The biggest jump in searches was from the US at 57 per cent, probably driven by the political and economic uncertainty, as well as skyrocketing COVID-19 cases.

Hong Kong followed at 17 per cent, also affected by political upheaval. Third highest was Singapore at 15 per cent. Interest from China in Australian property continued to plummet, falling 39 per cent over the past 12 months.