Atlas Market Insights

What are the key risks to the market right now? Although across Australia, there are mostly positive signs for the property market, there is still risk involved in recovering from a pandemic. The primary, and most obvious, risk is the virus. We know from previous outbreaks that if there is another outbreak of COVID-19 and we see extended periods of lockdown, that’s extremely disruptive to our economy. For example, when Melbourne went through its second wave of lockdowns, there was a more significant impact on housing market activity than we saw in the first round. Even a regionalised period of lockdown impacts on national confidence, so the virus is a risk to what’s been a strong recovery period. However, with the COVID-19 vaccine already being rolled out across the country, another outbreak is less certain. Therefore, all the new confidence the market is generating is justified and likely to sustain excellent levels of activity. How is investor participation trending? In Queensland, investors only made up 22% of mortgage demand, whereas usually we would expect about a third of the demand to come from investors. However, this figure has been proportionally rising since September 2020. In my opinion, Queensland is providing investors with better market fundamentals in the sense that it’s cheaper with high rental yield and strong renter demand. When these factors combine, it’s no wonder we are seeing investors more active in South East Queensland than Sydney. Owner occupiers have risen through the ranks to be one of the most active segments in the market, obviously taking advantage of government schemes like the First Home Loan Deposit Scheme, Stamp Duty Concessions, Home Builder and state specific concessions. There is a lot on offer and when combined with super low interest rates, it highlights the number of incentives available for first home buyers. However, Queensland has seen a different type of increased migration throughout the pandemic – interstate migration. They have outpaced every other state, seeing migration at 90% above the decade average. This has made the state relatively insulated to a lack of international buyers and has even grown their economy. 10