The housing market is ready to be put to the test in 2021, with further price increases expected on the back of limited stock and strong demand, REIA president Adrian Kelly has said.
Touting the property sector as crucial to Australia’s economic performance, Mr Kelly said he expects the regional relocation trend to gain further momentum in 2021 as the winding back of stimulus measures such as JobKeeper and JobSeeker raises “temporary issues” for tenants in capital cities.
“Traditionally, there is a reduction in the number of house sales over the holiday period due to buyers going away for the festive period, but due to the current restrictions, people are taking advantage of the market conditions while they are unable to travel and looking to buy while they can,” he said.
Anticipating the likelihood of a stall in growth in new dwelling investment in the 2020-21 fiscal year, Mr Kelly noted that the forecast for dwelling investment has, however, been revised slightly from -4 per cent in the pre-election economic and fiscal outlook to -3.5 per cent in MYEFO.
He also raised the possibility of a federal election being called as early as August 2021, calling on policymakers to make measured commitments for property policy for all players in the real estate industry from first home buyers to investors.
“In May just prior to the 2019 election, house sales were the lowest in two decades across Australia, which was largely attributed to election commitments from the Federal Opposition to abolish negative gearing and capital gains tax (CGT) in their current form.
“Given the major role investors played and continue to play in providing housing over the pandemic, it is critical that in the run-in to the election, that policies from all sides of politics work for all players in real estate.”
Overall, Mr Kelly said, the real estate industry “looks forward to a positive year for the Australian property market with the promise of an Australian COVID-19 vaccination program allowing life to resume to a new normal”.
“For customers, whatever your objective is for this year, whether you’re downsizing, investing or making a lifestyle move – talk to your local agent about your options for 2021.”