PERTH PROPERTY MARKET PREDICTIONS FOR 2021
The last 12 months have been a rollercoaster for Perth property, starting off with some long-awaited growth in the established homes market, followed by a short COVID-19 downturn and a recovery.
Meanwhile various government stimulus measures have seen the struggling land and new home markets soar.
So, what does 2021 hold? If you’re looking to get a loan, there’s some great news for borrowers.
Resolve Finance managing director Don Crellin predicts that interest rates are unlikely to go lower during 2021, and even less likely to go up.
“The Reserve Bank of Australia has signalled they expect rates to stay at the current level of 0.1 per cent for at least 3 years,” he said.
“We would need to see labour markets rebound significantly and for inflation to rise (and be consistent at these levels) to around 2-3 per cent for any rate rises to be considered.
“The great news for borrowers is we’re starting to see some home loan rates with a 1 in front of them.
“Record low interest rates, coupled with the confidence that they’ll likely stay low for some time, will benefit many West Australians who are in the property market or looking to get in.”
PROPERTY PREDICTIONS
First home buyers — it’s a great time to settle in to managing their first large home loan commitment.
Upgraders — have confidence to take the next step, knowing rates should stay low now for some years to come.
Refinancers — there’s never been a better time to look for a better deal. Competition amongst lenders is fierce.
Renters — in some suburbs of Perth, it’s now cheaper to buy than it is to rent. This trend should continue into 2021 with vacancy rates decreasing across the city and rental prices rising (and they’re expected to rise again in March once the government’s rental freeze guarantee expires).
WILL IT BE HARDER OR EASIER TO GET A LOAN IN 2021?
Many lenders experienced significant delays in assessing and processing home loan applications during 2020 due to the upheaval of workplaces and the volume of loans and refinance applications that came through. We expect access to credit and lender turnaround time to improve in the year ahead as we settle into a new normal.
The proposed changes around responsible lending (if it passes through parliament) will likely help ease restrictions to credit (and help improve loan processing times) — but this doesn’t mean a loosening of standards, just a better clarification on regulatory expectations.
WHAT GOVERNMENT ASSISTANCE WILL BE AVAILABLE TO HOME BUYERS IN 2021?
Government assistance increased during 2020 in response to the economic impact of COVID-19.
The First Home Loan Deposit scheme was introduced to allow selected home buyers to get into the market with a 5 per cent deposit while avoiding lenders mortgage insurance. An additional 10,000 places were opened up in the scheme for those looking to build or buy a new home in 2021.
The Federal Government launched the HomeBuilder grant providing an amount of $25,000 to eligible purchasers. The grant will continue in 2021 albeit at the lower level of $15,000.
The First Home Owners Grant and stamp duty concessions remain unchanged.
If you are looking to buy, sell, lease or rent in 2021, call the most dedicated team in Perth, Mi Casa Property on 08 9339 7079 to help you with your property journey.
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