Over the past 2 years, the COVID pandemic has dramatically affected business sectors, causing changes, both on a micro and macro-economic level all around the world. However, here in Australia, the property market specifically suffered amplified highs and lows which turned the stable sector into a volatile bubble. As one of the top Property Development Companies in Sydney, we examined the data, and now bring you the events that shook the country in the past 2 years.
With unemployment rates and people working from home becoming more abundant, people decided to move out of the city, driving prices near the CBD down. As a consequence, rental yields increased in regional New South Wales. Sydney, in particular, saw this volatility as house prices dropped significantly in early and mid 2020 and increased to the highest point in the past 10 years in March 2021.
FOMO or Fear Of Missing Out was one of the biggest drivers of the price increase in auctions but government incentives and RBA prompted people to buy in a market that barely stayed low in the first place. The more people rushed to jump onto the bandwagon of monetary policies and dropping interest rates, the less properties were being auctioned, and the more the prices surged. Consequently, more people rushed to buy, thus, creating the bubble that kept growing in size during the lockdowns.
If you want to learn more about FOMO and skyrocketing prices click here to read more about it and keep up to date with Everything Property, follow our social media accounts and subscribe to our newsletter here.
Not only properties but also developments
Of course, the property market is made-up of multiple sectors, and one of the most popular ones is the property development sector. Just as the housing scene, developers had trouble with the supply of sites as the frenzy to buy continued, and developments suffered because of it. But now, as the median price starts to drop and auctions decrease, the best developers in Sydney begin to attain the best sites.
As property development professionals all over the country agree that the market became volatile thanks to multiple reasons and held thanks to FOMO and incredible incentives from the government, they also agree that with vaccination rates increasing and more freedom being granted, the dust is starting to settle and the market is finally levelling.
According to CoreLogic, the bubble won’t burst until 2023. If you are still having doubts that investing in property is at least worth thinking about, read this post again. Book a free consultation with us today and learn more about what we can do for you, and how we can help you succeed in your property journey.