The Australian property market has had a great year but things could accelerate even further as we close in on 80 per cent vaccination and borders reopen.
There are plenty of examples of cities around the world that have experienced even hotter pandemic-driven results than here at home and foreign investors could hit hard when borders reopen and overseas students return.
Juwai IQI chair Georg Chmiel spoke to Business Insider Australia.
“In Australia, owners have benefitted from significant increases in value,” he said.
“The higher prices make it harder on buyers, but they need only look at Los Angeles and Montreal to see that things could have been worse.
In those two cities, prices surged at about triple the rate as in Sydney.”
Across the ditch in New Zealand, the runaway property market was so hot the central bank stepped in with lending restrictions to rein it in.
Cities like Melbourne and Sydney are sitting around the middle of the pack when compared to global cases like this said Mr Chmiel.
“Australia has an appealing story of strong but relatively measured price growth. It’s doing much better than global competitors such as London or Tokyo, where prices fell by 6% and 7% respectively,” he said.
But it’s the potential return of Chinese investors that could see the property boom continue and accelerate as lockdowns end and borders reopen, but it could also be somewhat subdued after two long years of lost migration and large numbers of tenants leaving inner city apartments.
“Our Australian forecast for 2022 is for price growth to continue at more moderate rates,” Mr Chmiel told Business Insider.
“The same factors that have been supporting demand over the past year and a half are still prevalent, most notably cheap mortgages and a fear of missing out. On the other hand, an increase in supply and buyer fatigue will likely reduce the rate at which prices climb from the past year’s highs.”