A property investor has predicted
Australia’s median house price will surge to over $1 million in the next three
years, as the economic recovery acts as a tailwind for the industry.
Survey results by Custodian have shown that investors
have been waiting for good news on the health and economic front, with one in
five looking to add to their portfolio over the next 12 months.
However,
Custodian managing director JamesFitzgeraldbelieves investors who
wait could be paying more, with Australia’s property market likely to grow
quickly during the recovery.
"During
the global financial crisis of 2009, unemployment rose to 6 percent while
house prices increased by 19 percent and 24 percent inSydneyandMelbourne,
respectively, between 2010 and 2012,” Mr. Fitzgerald said.
He
told investors that history could repeat itself, with the current risk-free
rate set by the RBA at a record low.
"The
recent drops in interest rates and the RBA extending bonds from the normal
three-year term to now five to10 years means banks can now offer three to
five-year fixed rate deals at well below2 percent.
"As
a result, median house prices in Australia will accelerate to $1 million as
early as 2023,” Mr. Fitzgerald said.
Where will investors buy in 2021?
As
investors look to take advantage of the record-low interest rates, Australia’s
eastern seaboard looks primed for a market boost.
The
survey conducted on behalf of Custodian revealed that 22 percent of
respondents had put off buying an investment property in 2020 because of COVID.
For
those looking to invest next year, NSW was the top pick in 2021, with 33 per
cent of respondents planning to buy there, followed by 29 percent in Victoria
and 27 percent in Queensland.
About
6 percent were planning to buy in South Australia and Western Australia, 4 per
cent in the Northern Territory and 2 percent in Tasmania and the same number
overseas.
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Jason Gwerder
Monday, 4 January 2021
