Despite lockdowns, some global real estate markets are doing well.
Around the world, the economic fallout from the coronavirus pandemic and the lockdowns that followed have a far-reaching impact on real estate markets. Property prices in some areas are showing unexpected resilience despite this disruption.
In Australia, the largest portal—realestate.com.au—reports that regional areas dominate the list of areas with the largest price growth for the four-month period to the end of August 2020.
“Western Australia has seen strong price growth which reflects the fact that low interest rates, government stimulus, and the bounce back from COVID-19 have led to strong demand in the state, which is pushing prices higher,” says the portal’s Executive Manager for Economic Research Cameron Kusher. “There’s also strong price growth in mining regions reflective of the strong demand for commodities. As with many other countries, there is a strong interest in outer-cities and country living with families leaving inner-city areas.”
Top Regions for Growth
The top 10 regions for price growth in Australia are led by country areas in Western Australia which have seen prices rise by 74% and 62% in the last few months. Country areas in Victoria and New South Wales have seen price increases of between 30% and 45%. Kusher also said that many of the top regions for price growth have had less expensive median prices than the broader market, which suggests that city dwellers are trying to escape expensive city property prices. The median price across the top 50 best performing regions was $275.000 compared with the national median home price of $425.000.
The largest real estate company, Ray White on the Gold Coast, reports that in October 2020, 21 of their 30 auctions were sold prior to or at the auction. Some 42% of their registered auction buyers were from out of state with an unprecedented number of expats booking showings virtually. They’ve also seen a large number of buyers from densely populated cities like Melbourne and Sydney moving to Queensland and that has fueled price increases.
Queensland has seen a surge in real estate demand with locals repositioning themselves to reduce debt or change lifestyles. Investors no longer want to leave money dead in the bank or risk an overheated stock market. Ray White reports that rental inquiries on the Gold Coast in the last three months have doubled, and the current vacancy rate on residential properties in .07%, down from an average of over 3% pre-COVID-19. Three Australian cities made the top 20 in an international ranking of rising housing markets in the world, namely Perth, Gold Coast and Sydney.
Most of Australia was fortunate to ease out of lockdown restrictions in time for the spring buying season. The real estate market is now benefitting from the fact that the country has managed the pandemic a lot better than many other countries.
Peter Gilmour is REAL Trends chief foreign correspondent and Chairman Emeritus and co-founder of RE/MAX of Southern Africa.