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Buyer confidence returns, fuelling transactions in 2021
Buyers who had put their purchases on hold as a result of the COVID crisis are now feeling confident enough to buy again, new research has suggested, predicting property transactions to spike in early 2021.
Property transactions are forecast to increase 25 per cent in 2021, with the rise expected to kick off over the next three months following a significant slump though the middle of 2020, new data from RiskWise Property Research has revealed.
Looking back on 2020, Doron Peleg, CEO of RiskWise Property Research, said that “although transactions in the established market continued to flow through in modest volumes, through April and May off-the-plan sales were becoming increasingly scarce”.
“The exact final numbers will only be known in the fullness of time, but it seems likely that with total stock listings stuck at low levels deep into 2020, stamp duty coffers will experience a substantial hole due to this year’s major disruptions,” Mr Peleg said.
Predicting that it will be cheaper to buy than rent in 2021, given the continued decline in mortgage rates on the back of a record-low cash rate, Mr Peleg is confident in a significant increase in transaction rates over the next 12 months.
“Many lenders are now offering fixed mortgage rates from under 2 per cent for the first time, and responsible lending obligations also finally look set to be rolled back in 2021,” Mr Peleg said.
“We forecast a strong 25 per cent increase in transactions in 2021.
“As we have previously detailed, it’s now cheaper to buy than to rent for many younger prospective market entrants, and investors will be back in the new year as an unusual opportunity to positively gear investments presents itself.”
Mr Peleg also noted increasing sentiment in Victoria, which is helping gear market growth.
“Our market research suggests that there is a significant burst of pent-up demand set to be unleashed as Victoria’s economy has reopened and travel restrictions are eased”.
