Merry Christmas, from us to you & what to expect in 2021
“Your camera is turned off”, “Let’s zoom”, “You’re on mute”. I think we’ve all been saying these phrases a few too many times this year.
From all of us here at Black & White Finance, thank you for your support during 2020. It’s been a huge one that’s for sure. We wish you and your loved ones a happy, safe, and healthy holiday season – regardless of our circumstances, let’s try and make the most of it!
As we all happily leave behind 2020, an unforgettable year for all of us with a few more last-minute surprises, we do have a lot to look forward to in 2021.
So, we leave you with a snapshot of what we expect for 2021 in the Australian finance and property sector.
Positives to look forward to:
Low-interest rates to stay
The Reserve Bank of Australia (RBA) has set not only the cash rate at 0.1 per cent, but also the 3-year government bond yield to 0.1 per cent. Making it very clear in their November 2020 statement, “the Board is not expecting to increase the cash rate for at least three years”, see here the actual statement the RBA made: https://www.rba.gov.au/media-releases/2020/mr-20-28.html
Government support to stay
We’ve seen an unprecedented level of incentives thrown at our new home and first home buyers, which has seen this sector continue to grow. The list of the first homeowner incentives is here: https://www.rba.gov.au/media-releases/2020/mr-20-28.html
Less strict banking requirements
We’ve seen a lot of the banks in November and December wind back their credit policies, to pre-Covid levels and we believe we will see these lending standards normalised even more so in 2021.
Headwinds to be watchful of:
Virus worsening
We’ve seen the most recent news and according to experts, even though there’s optimism that buyer confidence won’t be dampened by another surge in cases, it’s definitely something to be weary of.
Population growth
Border closures, both domestic and international, has had a dampening impact on this which means fewer buyers to contribute to the competition. Some economists argue the lack of supply means that this factor won’t be one to be cautious of.
After considering all these factors, with low supply, house growth is generally expected. Some economists believe it will be around the 10 per cent mark for the country. Even after the weekend ending 19 December 2020, clearance rates were 74.9 per cent according to Domain and have been hovering around this level for the last few months.
Once again, thank you for your support. We hope you have an amazing break and look forward to working with you to achieve your goals in 2021. We will be recharging the batteries while the office is closed from December 23, and back to work Monday 11 January 2021. Be safe, be merry and stay healthy.
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