At the end of 2020 property research firm Corelogic released their Best of the Best 2020 Report. With many experts predicting doom and gloom amidst an unprecedented pandemic and massive economic downturn, CoreLogic found that Australia’s property market remained incredibly resilient. The performance was strong, all things considered, in many areas – from property values to rental yields.
Australia’s best performing areas in 2020.
Australia’s high value areas continue to be at the luxury end. This is true whether you are looking at house prices or at apartment and unit prices. In Victoria, the strongest performing areas for median unit value were Brighton, Melbourne and the inner south – with the median value sitting at $1,114,661
Luxury areas of Australia were vulnerable to the pandemic but, like previous financial crises, the volatility in property values goes both ways. Where these areas may see sharp drops they can also see quite quick recovery. Thas has happened in most luxury inner city areas of metropolitan Melbourne. There has also been significant growth in regional areas from those looking for a tree change or sea change.
The strength of metropolitan properties is perhaps best exemplified by what happened in the suburb of Melbourne. Melbourne’s unity prices did have a small decline in value over the pandemic (from March to September) of 3.4%. At the same time Melbourne had the highest volume of sales. So, whilst there was plenty of stock on the market there were also plenty of buyers – meaning values remained relatively consistent.
Looking Back at 2020
Whilst there was an initial shock a number of factors added to Australia’s slight growth in housing value to September 2020. A number of factors contributed to growth of 1.1%. These included government interventions and grants, mortgage deferrals and record low interest rates.
Growth happened exponentially across lifestyle areas as people got used to working from home and wanted to escape the inner city. International border closures are still having a big impact on inner city rental yields, especially where international students are often the tenants and they are not currently allowed back into the country.
2021 – Looking Ahead
Mortgage interest rates are still at record lows. The economic recovery is travelling well across the country. The end of mortgage repayment deferrals has not seen a huge influx of property onto the market. The factors that led to the predicted massive drops in real estate values have just not occurred.
The Government is proactively working to support the real estate and construction industry with many incentives – especially for first home buyers. This presents strong indicators for growth across Melbourne apartments in 2021 and beyond