CORONAVIRUS COVID-19 PANDEMICRESIDENTIAL PROPERTY

Housing recovery from pandemic stays on pace

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HOUSING demand is on the rise in Australia and internationally as prices and construction experience an uptick in recent months.

New research from Oxford Economics has shown resilient housing demand from as early as mid-2020, with total house approvals hitting a record high of 13,785 in December 2020.

While inner-city apartment markets have continued to struggle, with rental demand and apartment rents falling as overseas migrant demand shrinks.

This uptick has been felt internationally, with new house approvals and prices rising in the US, Canada and New Zealand in the past six months. This despite significant differences with the COVID-19 pandemic.

The common factor in the re-emergence of housing investments has been low interest rates, higher household savings and changing preferences.

This suggests that demand will outlive the conclusion of the HomeBuilder imitative, adding confidence to a strong forecast of the market over 2021 and 2022.

Changes in household preferences look unlikely to reverse from the increased importance placed on space and housing, with money that would once have been put aside for holidays and leisure now more likely to go towards home improvements or relocations.

Regional markets have continued to feel the positive impact of COVID-19 restrictions, with more households choosing sea and treechanges.

House approvals in regional areas across the country have experienced a 35% year-over-year growth for the second half of 2020. With Canada experiencing similar growth at 30% year-over-year.

With a running total of 65,000 applications currently submitted under the HomeBuilder program, providing a significant boost to the countries construction, strong fundamentals are likely to continue after the upcoming deadline next month (31 March 2021).

Recovery from the pandemic, with vaccine rollouts, a reversal of reduced overseas migration and improving economic conditions, should in conjunction with low interest rates enable increasing demand to be supported into 2021 and 2022.

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