Who remembers March 2020 when house prices were heading towards a 50% drop in value?
Well, if you’ve been living under a rock for the past 18 months, house prices have done the opposite during the pandemic. Records have been broken right across the country.
But the question must be asked, how is the market holding up given the recent run of lockdowns across the nation. With Sydney entering it’s ninth week of lockeddown, the entire state of NSW also lockdown and Queensland, Melbourne, Darwin and Canberra also being in lockdown at least once in the past month it has many of our frequent readers wondering if the continual lockdowns are weighing Australian’s buoyant property market down.
There are very few signs of any sort of housing stress in the country. There is a very limited number of distressed sales and compared to second quarter of 2020 loan deferrals are at a fraction of what they were.
Auction clearance rates remain high at over 70% signifying a strong appetite to transact on properties despite lockdown measures being in place.
Compared to 12 months ago, Australian households went into 2021 with stronger balance sheets. Data released from the Reserve Bank indicated that $55 billion was deposited into offset and redraw accounts. It’s no surprise to find out that Australian households have been more frugal with their money on the back of the pandemic. More savings, record house prices, less spending and low interest rates are all contributing factors to the robust property market.
Ultimately, I think Australian’s are confident in our economy. It’s almost like we’ve acknowledged that this is not going to last forever. We know vaccine rates are rising meaning that our economy will soon re-open not only in Australia but to the rest of the world.