As we head into the second quarter of 2021, the word that keeps springing to my mind when I think about the current state of play is resilience. Perhaps it’s because Australians have always had a reputation for resilience. We pull together and do what’s needed to face up to challenges and hence, we generally overcome them. As we have throughout this pandemic that’s ravaging the rest of the world – we’ve locked down when we need to and on the whole, we’ve followed the directives we’re given to minimise risk.
Resilience isn’t just about withstanding difficult events though, it’s also about bouncing back from them, even stronger than before. As the Australian property market has, with a vengeance. Interestingly, even in Melbourne where predictions were less favourable, the extra weeks and months of lockdown have failed to dampen the resilience of our culture, with the market down there almost as buoyant now as our local conditions.
The data proves out the story. The latest report from research house CoreLogic has shown Australian house prices are now rising at the fastest pace in 32 years, up 2.8% in just one month. This represents the biggest monthly spike since October 1988. Brisbane prices rose by 2.4% in March bringing cumulative growth to 4.8% for the quarter with the available supply of property unable to keep up with overwhelming buyer demand.
So why is this happening?
There’s a couple of strong economic fundamentals underpinning the situation, not least of which is the historically low cash rate. With the rate at just 0.1%, the word is that while lending restrictions may be brought in to slow the market if it continues to heat up, the RBA has no intention of lifting the cash rate until it sees sustainable and strong wages growth, along with low unemployment. In essence, this should allay mortgage holders fears of being caught out by rapid rate increases.
But even more so than the logical factors, throughout Covid Australian’s have rediscovered their emotional drive to ensure they have the best possible home. Always a priority even before Covid, we’ve had a timely reminder that home is absolutely where the heart is.
We’ve proven we’re resilient, beyond all expectations. As has our property market.
All the best,
Robert
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