Real estate markets around the world were impacted by the events of 2020. Some markets fell, others remained stagnant, and reduced housing inventory pushed prices up in others. Sydney’s market in 2021, from the perspective of property buyer agent Sydney, has the potential to rise in 2021.
There are a lot of positive signals and government action being taken that indicate 2021 will see Sydney’s market rise and possibly the rest of Australia’s markets.
1. FHLDS will help first time home buyers
First home buyers are at a disadvantage when buying a home because they don’t have another home to sell to cover costs. The First Home Loan Deposit Scheme offer deposit rates of as low as 5%.
The scheme also eliminates the need for mortgage insurance.
When the federal budget was announced in October, the scheme was expanded to 10,000 eligible buyers. Sydney buyers will be able to use the scheme for homes up to $950,000.
2. Low interest rates are here to stay
While the market starts to recover, interest rates will play a major role in Sydney’s market. Low rates are always favourable because they enable buyers to pay less for home ownership. Rates are between 1.77%% and 3.95%, with variable rates tending to be lower.
The rates for some home loans are as low as 1.77%, but rates may fall even lower in 2021.
Lower rates indicate a buyer’s market, and along with the FHLDS program, these lower rates may help would be buyers land in their first home or newly built home.
3. Responsible lending reforms
Responsible lending laws were designed to protect consumers, but many of these laws have not been updated to “meet the time.” Reform bills have been passed around to government officials that would loosen current laws.
The loosening is good for buyers and lenders, although there are also downsides.
From a market perspective, there will be less scrutiny when applying for loans, allowing buyers that may have been denied loans in the past to obtain them in 2021. Reforms are designed to spur growth and help consumers obtain loans.
Consumer protections will remain lower, so it is up to buyers to be more diligent and ensure that they can afford the loans that they procure. Borrowers will be able to take out loans for larger homes and autos thanks to the reforms.
Sydney’s real estate market is gearing up for growth in 2021 if our predictions are right. The government has taken positive steps to help borrowers obtain loans to purchase new or existing homes. A relaxation of responsible lending laws will further assist buyers obtain mortgages for homes that are bigger or that may have been out of their price range just a year prior.