News in brief
- 1. After the lull of 2020, real estate prices are on the rise again in 2021.
- 2. There is an obvious’afraid to miss‘, especially among young buyers.
- 3. Auctions have intensified and competition is fierce, mainly in Sydney and Melbourne.
- 4. A number of mortgage loans respond to new market entrants with smaller deposits, lower fixed interest rates.
- 5. A lower interest rate environment has contributed to general confidence and a sense of economic stability.
By the numbers: March property
$ 1.5 million is the median real estate auction price in Sydney, according to Domain.
$ 200,000 is the amount Westpac expects property values in Sydney to increase over the next two years.
$ 1 million is likely to guarantee you a property in other cities such as Brisbane and Melbourne, based on median prices (CoreLogic).
2.32% pa is the 2-year average fixed rate in Mozo’s database at present, while the 4-year average rate is 2.36% pa
1.69% of Greater Bank (comparison 3.49%) is the lowest 1-year fixed rate in the Mozo database today, 20bp lower than it was last month.
3.29% pa is the average floating rate in our database at this time.
1.99% of Reduce (comparison 2.05%) is the best variable rate in our database.
$ 29 billion mortgage loans were taken out in January, up 10.5% compared to the previous month, according to the Australian Bureau of Statistics.
Borrow for a house? Here’s what you need to know
Booming real estate prices – The pandemic was a setback. But recent activity suggests it was short term. That is the growth now that Sydney and Melbourne are expected to see median home values rise by at least 12% over the next two years, according to CommBank.
Very low mortgage rates – We are in a low interest rate environment and that matters. According to Mozo’s real estate expert, Steve Joccevski lowest mortgage rate and increased positivity fuel this fire. For example, rates below the 2% mark are no longer a rarity, and the RBA’s bond buying activity has even helped push 4- and 5-year terms to new lows.
Buyer interest is on the rise – Driving the increase in sales volumes is the will of the government HomeBuilder Program, which boosted property sales by more than 100% from the previous year, according to the Housing Industry Association. As of June 2020, use has been largely limited to freestanding homes, forcing buyers to go through fewer hoops than units in the plan.
On the Easter hunt – Even though the auctions are busy and large sums are poured over the reserve, this is only one segment of a much larger market. Not all properties are auctioned and in fact, in some cities, auctions are less popular than private sales. For example, in Brisbane and Adelaide customs clearance rates have been high, but on less than 100 sales in each city compared to Sydney and Melbourne. Check your region!
Need more? We can help you answer some of your initial questions here. Why not start by comparing some of the competing offers of our real estate loans division.