6. RISING MARKET CONFIDENCE
Buyer and seller confidence is solid, due to the property market showing such resilience during 2020 and the importance of ‘the home’ being realised.
From what we can see, the general population is showing signs of a ‘property market can’t fail’ attitude. Plus, not being able to travel overseas and the lack of interest (and ability in some cases) to travel interstate means we expect everyone will spend more time at home educating, working, playing and entertaining. Most of us need a bigger house. We want our own space AND we want a beach house! These statements are being backed up with acquisitions and low interest rates are also making this possible.
7. EXPATS CASHED UP AND COMING HOME
Last month, the federal government said 398,000 Australians had returned since mid-March 2020.
A staggering one in five of Australia’s highly skilled expat community has come home in 2020, according to preliminary findings of a survey by Advance, a platform that connects Australians around the world.
Of those, 19 per cent are looking for a new job, 18 per cent are working remotely for their offshore employer, 15 per cent are building their own business and 10 per cent have transferred to the Australian office of their current employer. Nearly a third have found a new job locally.
Thirty per cent of returned expats are here to stay, 21 per cent intend to leave as soon as the international border opens, while 33 per cent would like to move back offshore at a later date, the survey found. The remainder are unsure where they would like to live.
“Children and ageing parents change the equation of living overseas. Expats have always thought they were 24 hours away by plane. Now they know they are not,” says Yasmin Allen, chairman of Advance and a director of Cochlear, ASX and Santos.
These buyers are going to be driving property markets in capital city premium markets and will also drive the lifestyle regions with acquisitions of holiday homes.
8. FIRST HOME BUYERS HUNGRY FOR A HOME
The grants and exemptions on offer differ from state to state, but in general, there are grants for buying new or established, with the new (or building) options always yielding better results, as the state governments look to drive one of our most important sectors; construction.
These grants bring more buyers into the market sooner that they would have otherwise had capacity to do. Plus, they may be willing to pay more for property on account of the spending boost – great news for vendors.
First Home Loan Deposit Scheme
One of the more talked-about government measures, the First Home Loan Deposit Scheme (FHLDS), allows eligible first home buyers across Australia to buy a property with a minimum deposit of 5 per cent without being charged lenders mortgage insurance (LMI).
Usually, a 20 per cent deposit is required if you want to sidestep LMI costs, which can, in some cases, cost up to tens of thousands of dollars. Under the FHLDS, the federal government guarantees the difference.
The scheme does have property price thresholds, so it’s important to check if the price bracket you’re aiming for falls below the cap.
The 2020 federal budget added an additional 10,000 places to the scheme and updated the price thresholds, which better reflect property values in capital cities.
9. STAMP DUTY CONCESSIONS OR REDUCTIONS INCREASING THE BUYER POOL
Changes for Victoria
In welcome news for both home buyers and developers alike, the most publicised duty measure in the Budget is a reduction in duty for purchases of residential property with a dutiable value of up to $1 million.
The applicable discount is 50 per cent for new residential properties and 25 per cent for existing residential properties, for contracts of purchase entered into between 25 November 2020 and 30 June 2021.
Changes for NSW
If implemented, the proposed changes could give buyers the freedom to choose between paying stamp duty upfront or paying a much smaller annual property tax, when buying a home.
Removing the upfront cost of stamp duty could remove tens of thousands of dollars from the home purchase process and make it easier for first home buyers, families looking to upgrade and others looking to change their property to save what is needed to purchase their next home.
There is no change for those who have already paid stamp duty on their existing property. The annual property tax only applies to new buyers who choose this option.
No major changes for Queensland
The Queensland Stamp Duty Rebate/ Concession, is up to $8,750 for those buying an established or newly built home priced at $550,000 or under. The Concession also works if you’re buying a block of vacant land for under $400,000 where you can get a Rebate of up to $7,175.
These changes allow buyers that would have been 1-2 years away from hitting the market to transact sooner. And for some they will have a greater buying power and increased budget. All positives for driving property values.
10. MORE ‘KNOCK DOWN & REBUILD’ STRATEGIES IN THE MIDDLE RING SUBURBS
According to McCrindle Research, 78 per cent of people surveyed believe working from home is here to stay with most expecting this to be 2-3 days a week. But how many of us actually have the space to do this? Especially with more than one ‘work-from-homer’ in the house. Renovations can be expensive and unpredictable, whereas the growing trend of knocking down an old 50’s-70’s weatherboard or brick home on 400-800sqm and replacing it with new build can not only solve the WFH problem, but also result in a very profitable project.