Should you buy a property in 2021?

As we say goodbye to what has been an extremely tumultuous year, it’s time to look ahead and plan for a better and brighter 2021.

Many people look for a fresh start at this time of year, and if’s previous claims that property views go up in the month of January, then that means a lot of people are looking for a new property to make that happen.

But, will 2021 be a good year for buying?

Everybody’s circumstances are different but if you’re in a good position and have the financial backing behind you then you may see a good window of opportunity to get into the market at present.

Interest rates are at record lows 

One of the biggest factors that will drive people into the property market in 2021 is record-low interest rates.

With borrowing being cheaper than it’s ever been, the holding costs to buy a home or hold onto an investment are very affordable. However, it’s still worth being mindful of overstretching yourself in case your financial circumstances change or interest rates go up in the future.

Other incentives are available too

Of course it’s not just low interest rates that are pulling in buyers. Many people, in particular first-home buyers, are looking to take up government grants and offers that have been introduced in a bid to prop up the Australian economy in the wake of COVID-19.

One of the biggest incentives has been the HomeBuilder scheme, which while available at a reduced rate for the first few months of 2021, is still bound to see a lot of buyers rushing in to take advantage of it.

Household savings are up

With things like travel and certain recreational activities being off the cards in 2020, a lot of people have actually been able to save more money than they otherwise might have.

This, coupled with government assistances packages and tax relief, has meant that a lot of people have been able to get a massive savings boost to help them make their way up the property ladder.

Government infrastructure spending

If all over the above aren’t incentive enough to get into the market, there is also a lot of investment going into major new developments and infrastructure right across the country (such as the metro line in Sydney), making a lot of areas more appealing to investors and to local residents alike.

However, there are some things to be aware of…

Increasing competition

With so many good reasons to get into the market there’s a good chance that competition is going to heat up as the year progresses.

That means if you’re looking to jump on the property bandwagon then you might be better off doing so sooner rather than later if you can.

Potential economic interventions

There is the potential for the property market to actually get too competitive next year, to the point where measures may need to be introduced to prevent it from overheating and property prices from getting too high.

The RBA is unlikely to raise interest rates anytime soon but they may see reason to introduce macro-prudential interventions, as they have done previously, to help calm housing market conditions.

Not every property market is equal 

There’s no two properties that are exactly equal, so before making any purchase it’s always recommended that you do your own research and due diligence on the market and the property itself.

The year 2021 should be a good year for the property market as a whole, but as 2020 has taught us, it’s always a good idea to be prepared for anything, and to expect the unexpected.

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