Economic outlook a boon to property market – REIA

The latest economic predictions are good news for buyers and sellers, peak body says

Economic outlook a boon to property market – REIA

The rebound in Australia’s economy projected by the Mid-Year Economic and Fiscal Outlook (MYEFO) is good news for the property market, according to the Real Estate Institute of Australia.

“The uplift in expected economic growth from 1.5% in 2020/21 to 3.75% in 2021/22 is a major boost to the economy,” said REIA President Hayden Groves. “Together with a drop in the unemployment rate to 4.5% in 2021/22 and 4.25% in the following year, wages growth of 2.25% and 2.75% in those two years and then accelerating along with a CPI within the RBA’s target will be a positive for the property sector.”

Hayden said the outlook for interest rates was “benign” under this scenario, and signs of stabilising prices should give both buyers and sellers confidence.

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“With evidence new listing enquiries are increasing, the number of properties coming to the market early next year should approach long-term average levels – which, in turn, ought to moderate price rises, easing affordability decline experienced in 2021,” Groves said. “With the possibility of tax cuts next year increasing disposable incomes, affordability would get a boost.”

Groves stressed that there were still supply issues to contend with, but said the overall outlook for the sector was good.

“While all the signs are positive for the property sector, a long-term plan addressing the supply side is still needed,” he said. “For Australians considering buying or selling, this MYEFO should give them the encouragement to reach out to your local real estate agent to discuss your options.”