Home buyers should tread carefully when purchasing their next property cautions the director of KR Peters, Peter Nicolls.
Mr Nicolls says it is important buyers factor in not just what is happening in the property market now, but what the market will look like over the next one to three years, prior to making an offer.
No one has a crystal ball, but after 44 years in the real estate industry Mr Nicolls has seen more property cycles than most. However, 2020 has surprised even a veteran of his longevity.
As the year draws to a close, the Australian property market is red hot thanks to a potent combination of record low interest rates, a raft of government incentives and the easing by banks of their lending criteria.
The market is being further fuelled by pent-up demand which has been unleashed thanks to the winding back of Coronavirus restrictions and the prospect of a vaccine rolling out in Australia in the first half of 2021.
"The return to normality in our everyday lives has seen homebuyers return to the property market in force," Mr Nicolls explained.
"With the opening of the borders, overseas residents are returning to the country seeking housing.”
"Add low interest rates and government subsidies and it’s a no brainer why we are currently experiencing a boom in the property market during these tough economic times."
Financial analysts are predicting house prices will continue to rise in 2021, adding yet more fuel to the property market and causing further price escalations.
It's an analysis with which Mr Nicolls agrees.
To put yourself in a strong buying position Mr Nicolls has a few tips:
"The current heat in the property market will subside by the middle of 2021 due to the ceasing of government grants and JobKeeper," Mr Nicolls predicts.
Despite an inevitable slowdown, Mr Nicolls has no doubt that buyers and vendors will remain active and the market competitive as the Australian economy recovers from its Corona-induced recession and consumer confidence rebounds.
"The property market will remain healthy as Australians have had, and will always have, a strong affiliation with bricks and mortar."