The Hunter Valley Property Market In 2021

For Hunter Valley real estate, 2020 defied almost everyone’s expectations, delivering strong gains even in the face of a once-in-a-lifetime pandemic.

Now, as we move into 2021 we believe there are five key trends shaping our local market that every buyer and seller needs to know about.

1. Stock is in short supply

Whether you’re looking to buy or rent, the reality is that property is in short supply right now. We can’t remember a time when there were fewer properties on the market compared to the number of people actively looking. This is leading to serious competition among prospective buyers and fewer days on market. We expect this trend will continue through the year, stimulating competition among buyers.

2. The Hunter Valley to become even more popular

Another reason we’ve been seeing so much competition for property lately is that our area’s population is growing. No longer dependent solely on mining, our local economy is becoming more diverse and vibrant. And, with COVID-19 encouraging many people to work from home, we’re seeing an influx of ‘tree changers’ whose jobs may be based in Newcastle or Sydney but who, thanks to telecommuting, can really work from anywhere.

This is also fostering greater competition in the market, especially for lifestyle properties including acreages, as people look for a change of pace and the chance to bring up their families or retire in the country.

We expect the demand for lifestyle properties in the Hunter Valley to only increase over 2021, as more people begin to call our area home.

3. First home buyers to remain a force

First home buyers were a real force in the Hunter Valley property market throughout 2020 and we expect they’ll stay that way in 2021. To encourage people into the housing market, both the NSW and Commonwealth governments have been offering generous subsidies, grants and exemptions to many first-time buyers. These include:

  • The NSW First Home Owner Grant. This provides $10,000 towards new homes under $600,000 or land, where the combined value of land and home is under $750,000
  • NSW stamp duty exemptions and concessions. First home buyers currently pay no stamp duty on new homes valued up to $800,000, existing homes valued up to $650,000 or land valued up to $400,000. There are also concessional rates above these thresholds.
  • The Commonwealth First Home Loan Deposit Scheme. This guarantees up to 15% of first homeowners’ home loans, meaning first home buyers can often purchase with as little as 5% deposit, without the need to pay for lenders mortgage insurance (LMI).
  • The Commonwealth First Home Super Saver Scheme. This allows first home buyers to make extra contributions towards their super and then to use these towards a home deposit.

On top of these, the Commonwealth and NSW governments have announced the HomeBuilder scheme will be extended until 31 March 2021, with a grant of $15,000 towards building a new home or carrying out extensive renovations (and you don’t need to be a first home buyer to be eligible).

4. No more stamp duty?

Potentially an even bigger development over 2021, will be the NSW government’s proposal to scrap stamp duty and replace it with an annual property tax. As it stands, stamp duty is one of the biggest obstacles to buying a home and this could have a real impact on the amount of activity in the market. That’s because stamp duty in its current form needs to be paid upfront as a large sum. The proposal would see it transformed into an ongoing smaller annual tax.

If and when buyers no longer have a need to pay stamp duty upfront, they may be prepared to dedicate more money towards the price of the home itself, and this too could have the effect of pushing values higher.

5. Prices to rise

In 2020, we saw Singleton’s median house value lift by 7% and the median apartment value rise 15%, according to realestate.com.au. We expect to see similar gains over the next 12 months.

That’s partly because of the trends we’ve also mentioned. However, it also comes down to the relative success NSW and Australia have had in containing the COVID-19 virus.

As a result of health measures and economic stimulus, the economy seems to be in better shape than many imagined heading into 2021, with GDP rising 3.3% in the September 2020 quarter and consumer confidence ending the year on a 10-year high.

Added to this is the fact that interest rates are at record lows – in November 2020 the RBA slashed the official cash rate to just 0.1% – meaning borrowing is cheaper than ever.

So, there is a lot going for the local property market right now and, whether you’re buying or selling, it pays to act quickly when you see the right property come up.

Want to know more about the state of the local market?

If you’d like to find out more about the state of play in the local property market contact One Agency Lindy Harris today.

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