A very recent and polarising discussion in the media, we take a look at the Australian property market’s post-COVID outlook for 2021. 

Disclaimer: Before we dive into this article it is important to note that the below information contains opinions and facts only, not personal financial advice. Before you take any action it is important to consult with a qualified financial adviser or mortgage broker who can appropriately assess your unique situation. For a discussion personalised to your needs, reach out to us here

This article also contains opinions regarding the state of the Australian property market in 2021, however, it is recommended that you consult with a qualified professional before making any decisions to invest in real estate.

The Goal

Owning a home is one of the biggest financial milestones one can achieve in their lives. For many Australians, their own home will be the biggest financial asset of their lifetime. Many people view being a property owner as a marker of personal, and financial success and security. Unfortunately, over the last few decades the steadily rising prices across metropolitan Australia have made it much harder for Australians to break into the market. Property prices across the last few decades have far outstripped wage growth. For many young Australians, the prospect of home ownership became much more daunting. 

Enter COVID…

COVID has devastated much of the world. Globally we are nearing record unemployment, and debt levels are soaring. Mental health is suffering, borders are closed, and nobody seems to really know when we will be back to “normal”, or settled into our new “normal” again. For those affected by any of the above, it can be difficult to maintain optimism during these times. 

However, it may not all be doom and gloom. For those keeping an eye on the property market, the current circumstances could potentially be considered a great opportunity. If you are fortunate enough to be securely employed and financially ready, the current economic situation also represents the potential to finally get on to, or take that next step up, the Australian property market.

So, could a potential tumble in the Australian property market across 2021 create an opportunity for hopeful first home owners and investors  to break into the market? Let’s take a look at what the 2021 Australian property market could look like…

The Doomsday Predictions

Since early in 2020, some of the largest banks and most recognised economists have been predicting staggering crashes in the housing market. There have been claims that the prices of homes could crash by up to 40%, although most estimates appear to be within the 10-20% mark. Has this happened though? Or is our property market more resilient than these banks, and economists give it credit for? Or, here’s a thought, will some property markets crash while others remain steady?

To look into the 2021 property landscape and achieve a comprehensive understanding, it is first important to understand that there is actually no single Australian property market.  In fact, what is commonly referred to as the “Australian Property Market” is an interwoven network of hundreds of smaller property markets across the country, each operating with their very own set of unique growth drivers, supply and demand. The micro-climate dynamics in each area, and across each type of dwelling fuel demand from different types of investors and owners. There are also the external economic factors to consider. 

Each little sub pocket of the property market will react differently to the economic conditions. Currently, the 3 markets most negatively impacted by Coronavirus are:

  1. The outer-lying suburban fringes of bigger cities, which are predominantly made up of newer settlements;
  2. The high-rise apartments pockets in the CBDs of big cities; and 
  3. The more high-end luxury market – where houses are priced above $3m.

The Numbers

Confused? Let’s look at how property prices performed in different markets in June 2020. According to popular Property Investment information site PropertyUpdate.com.au, since our international borders closed on the 22nd of March 2020, 

  • The median Sydney house price dropped 1.9%,
  • The median Melbourne house price dropped by 4.4%,
  • The median Perth property value dropped by by 2.2%,
  • The median Brisbane home value dropped just 0.3%, and
  • The median Adelaide house price rose 0.6%.

It is clear that there was a drop in the market. 


There are certainly many challenges ahead for our economy and for our property markets, but there are also many reasons to be optimistic about certain segments of the Australian property market, particularly in the long term. Westpac economists  recently publicly stated that they believe property prices will climb steadily over the next two years- from a predicted 14% in Sydney to a staggering 20% in Darwin, despite the pandemic!

 While not in line with the predicted growth trends pre-COVID, the evidence presented by Domain shows the Australian property market as a whole is resilient, and will continue to prosper. Domain recently published this article, where they stated that they believe property prices will bottom out in mid-2021, but already be rising by the end of the year. Contributing factors to this is the extension of the JobKeeper payment, the record low interest rates, and the fact that Australia’s debt levels aren’t too high relative to other countries. Thanks to the RBA deciding to reduce the interest rates to a record low of 0.10%, many banks have lowered their interest rates for Aussies- which has freed up cash flow for some homeowners.

Another reason house prices may not drop as drastically as anticipated is due to the Federal Government’s recent HomeBuilder Grant, which we have dissected and discussed in our previous article Understanding the Home Builders Grant, Construction Loans and How They Interact. Although applications for this grant are wrapping up now, the support for the construction industry means many more first home buyers have opted to be first home builders instead.

Disclaimer: It is important to note here that other websites have reported different numbers, so please use the above as a general guide. 

So- how does one make sense of this? On one hand there are those saying the market could crash by up to 40%, driven by record unemployment and debt levels. On the other hand, others are predicting growth. 

So… where does this leave us? 

It can be hard to make sense of all the media headlines coming at you hard and fast. There are so many conflicting opinions and voices saturating the market place, it is easy to get lost in the fear. However, it is important to remember that demand for Australian property will continue to stay strong, especially for residential property, according to this article published by the Australian Financial Review. If we take how the Australian property market(s) recovered after the 2008 GFC as an indication of how resilient they are, then the recovery looks to be steady, and predictable. It may take a number of years, but the return to norm is likely. 

If you are financially secure and are currently in a position to buy into the property market, 2021 could present a real opportunity to take your very step on to, and next step up, the property ladder. How do you know if you fit the bill as “financially secure”? Having  an emergency fund, a deposit saved up, and have at least one strong, stable income stream are all good markers of how financially secure you are.

If you are financially secure: Property prices in Australia have soared over the last few decades, and any slow down in the market presents investors, or prospective home-owners with the opportunity to buy their slice of the Australian home-owning dream. Not to mention the record low interest rates currently on offer by the banks, which could help make the repayments a little easier on your cash flow.

So, You Ready?

Thinking you might be ready to take the first step into owning your first home? Check out our comprehensive article regarding all you need to know about being a first home buyer here. It’s also worth checking out our article on the First Home Loan Deposit Scheme, to see if you could qualify for this really useful tool in fast-tracking your deposit !

At Pursue Wealth, it is our job to keep a pulse on the economic climate and understand the ins and outs of benefits available to our members. We understand that every person has a unique financial situation, and we pride ourselves in offering tailored financial advice for millennials and wealth accumulators.

If you are in a fortunate position to be taking advantage of the current market, book in for a consultation! And if you are not yet  in the financial position to be considering stepping into the market, but want to make a plan to get there- we’ve got you too! We’ve pulled together some useful tips for how you can stay on track of your budget, and savings during COVID- check it out here.

We hope this article has shed light on Australia’s property outlook in 2021. For more information, please follow this link to book in for a 15-minute complimentary chat with our property specialists.

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Pursue Wealth Pty Ltd is a wholly owned subsidiary of Grimsey Wealth. Pursue Wealth’s Financial Advisers are Authorised Representatives of Grimsey Wealth Pty Ltd, ABN 90 113 911 247 AFSL 293334

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