Atlas Market Insights

Upgraders are particularly active at all price points however the top end of the market has been a star performer over the past 12 months. In 2021 we are also likely to see rental markets improving. Although the rental market was weak during the peak of the pandemic, it continues to improve, particularly for house rentals. Nevertheless, it does remain weak in some locations, but it isn’t deterring investors who are increasing their buying activity in the market. As we see the COVID-19 vaccine become readily available across the globe, we are likely to see foreign students return and higher levels of immigration which will even further stimulate the market. What segments are driving market growth? The return of investors will be a key part of market demand in 2021. In January 2021, housing finance commitments made by investors was at 29%, which is an increase from the last quarter of 2020. This is expected to rise back to the decade average of roughly a third over the next year or more. The market is strong and is experiencing high levels of activity, which often attracts investors. Paradoxically, this strength is deterring first home buyers from the market, which were the most active segment throughout last year. This is typical behaviour of first home buyers though, as they prefer a slower, predictable marketplace unlike investors. An interesting point is that returning expats are likely to be stimulating blue chip areas. Although data is hard to find on expats, we are seeing increased searches on realestate.com.au from overseas, particularly countries like the US, Hong Kong, Singapore and the UK. These are countries with large Australian expat communities, so it is likely these people are searching to return home. Anecdotal evidence from real estate agents also suggests that expats are extremely interested in buying into premium and lifestyle markets in Australia. We might also begin to see economic migrants moving to Sydney, but perhaps once the vaccine is more widely spread. 7