Been to an auction lately? Then you’ll have heard these words more than ever before. Because right now the property market is seriously hopping! In fact, according to Australia’s leading online property settlement platform, PEXA, there were more than a whopping 60,000 sales settlements recorded in February 2021.
Not bad given the effect that the COVID-19 pandemic has had on the global market. Am I right? Us Aussies sure have a lot to be grateful for.
On the go? Here’s 30 seconds of take outs:
- Australia’s housing market got off to an incredible start with 60,508 sales settlements completed nationally in the month of February 2021.
- This means Australia saw a year-on-year rise of an incredible 28.2%.
- All five Australian states showed significant year-on-year growth.
- Western Australia and Queensland property markets performed the best and show no sign of slowing down.
- After a slow January, NSW and Victoria have recovered exceptionally well.
- 2021 seems to be Queensland’s year, with strong growth from the very start!
- Investor’s confidence is at an all-time high in many new and established growth markets.
Keep reading >>
Capital Properties blog post discussed why ‘Interstate investment is so hot right now’ so, we figure it’s time to back that up with some fresh-off-the-chart statistics. Let’s dive right in. In total there were 60,508 sales settlements completed nationally in February (2021). This equates to a national year-on-year rise of 28.2%. And this incredibly strong start to 2021 was evident across the country.
Let’s drill a little deeper into these numbers.
All five Australian states recorded double digit percentage growth year-on-year. But Western Australia saw phenomenal growth, having experienced an extraordinary 55.6% spike. Total sales settlements in January and February 2021 reached 15,262.
CoreLogic data reported that Perth’s southern suburbs fared best, with median housing value increasing by 11% to 15% between March 2020 and January 2021. Eliza Owen, Head of Research at CoreLogic, said that the surge in lower-priced houses was mostly due to an influx of first home buyers. And WA Residential Real Estate Agent Tony Papineau agreed, saying “I think the low interest rate has got a lot to do with the increased demand as well as people not spending a lot on travel anymore due to the pandemic travel restrictions, so that trip to Europe that was going to cost $20,000 becomes a deposit towards a house.”
He emphasised the speed at which sales were taking place saying that “People are placing bids above asking price and putting a condition on it that they want to secure the property before it goes to the first home open and you get another 20 people turn up”.
And Western Australia’s real estate institute (REIWA) backs that up, reporting that the 2020 December quarter properties in the fastest-selling suburbs were being snapped up on average within six days.
With 8,886 total sales settlements for those first 2 months of 2021, sunny South Australia saw a year-on-year growth of 35.4%. There are numerous reports of strong growth with stories like the savvy Adelaide investor who walked away with a $621,000 profit on the sale of a house in the SA suburb of Fitzroy after only purchasing it less than a year ago.
It’s believed that fewer listings, increased levels of interstate interest, COVID-19’s impact on disposable income and South Australia’s comparative success in dealing with the pandemic are responsible for this strong market. Barry Money, Chief Executive of the Real Estate Institute of SA says there’s no sign of it slowing down, with agents being “busier than they’ve ever been“. And noted that Adelaide’s traditional selling points, such as reduced commuting times continue to be very attractive to interstate investors.
Although arguably the hardest hit state during the pandemic last year, confidence in the Victorian real estate market is high. Realestate.com.au Chief Economist Nerida Conisbee noted that Vic had the strongest lead up to Christmas on record which promises good things for 2021. When speaking to The Herald Sun in early January she said, “it looks like we are heading for a strong market and I think we will continue seeing high levels of activity in the new year.”
Her forecast factored in low interest rates, attractive buyer incentives and Australia’s economy continuing to reopen. And she made special mention of the continuation of the trend in people moving from Melbourne city to regional and coastal areas.
So, despite Victoria having a slightly down month in January, the state quickly bounced back with a healthy February, recording a 9.2% month-on-month growth. In total, Vic had 16,503 sales settlements in Jan and a buoyant 18,027 settlements in February. This is despite the fact that much of the state underwent a stage 4 lockdown due to COVID-19 outbreaks in 2020, with some businesses staying shut for 7 months. This strong recovery is particularly pleasing.
New South Wales
In New South Wales, lower volumes of new listings during January meant that NSW was the only state to experience a month-on-month decline. But it’s not all bad news. In total, NSW had 16,000 sales settlements in January 2021 and 14,131 sales settlements in February 2021. Which means that despite the slow January, the state still had a year-on-year change of +27.5%. Given February’s market brought plenty of new listings, it bodes well for the March market activity. All data points to a strong demand for housing with a recent surge in home sales which points to a strong autumn selling season.
Realestate.com.au Director of Economic Research, Cameron Kusher, said the unprecedented buyer demand and low supply levels have driven unseasonably strong transaction activity. And it shows no sign of slowing down with the volume of visitors searching online for properties for sale increasing by 57.8% compared to a year ago.
But good old Queensland was once again the shining star. In February 2021, QLD saw even more settlements than its big sister NSW! Yup, the Sunshine State confidently outperformed other traditionally strong markets on the East Coast with more than 31,000 property sale settlements in January and February 2021.
Our source Mike Gill, Senior Research Manager at PEXA, said that there were a few contributing factors to Queensland’s strong performance throughout the summer. He said, “The state had a terrific start to the year…and these results are indicative of heightened sales activity and price growth in the second half of 2020 for Queensland, leading to a positive flow-on effect for 2021”.
He also noted that “…there’s been an unseasonable shift in selling behaviour with the season starting much earlier to meet increased buyer demand.”
Given the increasing appeal of lifestyle properties due to the pandemic, due in part to the newfound ability to work from home, the added value for money in this state is not lost on investors. In fact, a new market of people buying using innovative technology to access house listings means that more people than ever are open to buying homes sight unseen.
And investment activity is thriving in Brisbane mostly driven by attractive rental yields and record-low interest rates. This is especially evident in price points up to the mid $700,000s.
But you’re here for the nitty gritty right? OK, here are the numbers you’ve been waiting for. In January 2021, Queensland sales settlements reached a stunning 15,435. And not to be outdone, February recorded sales settlements of 15,768. That’s a year-on-year change of 31.6%.
Overall Australia’s national sales settlements in January 2021 amounted to 59,804 and February’s settlements reached 60,508. Hence the year-on-year change of a 28.2%, surely making Australia the envy of the globe right now.
If you want to know how to best take advantage of this situation and avoid major FOMO (‘fear of missing out’), book your free Capital Properties discovery session now. We’ll make sure to point you in the right direction.
Source: www.pexa.com.au > property-now > property-now-issue-8