The price of houses grew at a rate nearly four times higher than units during 2020, putting downsizers in a strong position to release equity and be able to purchase a quality new ‘forever home’ for retirement.
CoreLogic's monthly market scan for December, published on 4 January, helps complete the picture of what happened in the bizarre COVID-affected real estate market of 2020.
All up, across Australia during 2020, houses grew in price by 3.7 per cent, while units increased by only one per cent.
It appears as though the popularity of houses has been driven by a surge of interest in regional areas, where houses are more prevalent among available stock, along with reduced demand for higher density investor-focussed properties in city areas.
It is possible as well that, as people are spending more time at home due to COVID, they are looking for the internal space and outdoor areas which houses typically provide.
CoreLogic’s research director Tim Lawless said that, excluding Melbourne, every capital city recorded a higher rate of capital gain for houses relative to units in 2020, as part of a market shift away from higher density housing.
“Unit markets have historically been more popular amongst investor buyers (however) demand from investors has been weighed down by weak rental conditions across the unit sector along with high supply levels in some precincts,” Mr Lawless said.
“A transition of demand towards lower density housing options has helped to buoy house values.”
Meanwhile, CoreLogic said the value of houses in regional areas had benefitted from increased demand for lifestyle properties and the shift towards working from home in response to COVID.
“Regional housing markets had generally underperformed relative to the capital city regions over the past decade, but 2020 saw regional housing values surge as demand outweighed supply,” said Mr Lawless.
The strong results for houses is good news for downsizers, who are typically selling these houses to move into a retirement village, land lease community or other downsizer-friendly property.
The graph below outlines the comparative price growth of houses versus units across capital cities and some regional areas:
The CoreLogic analysis reflects research by Downsizing.com.au, which found increased over 50 consumer interest in larger homes.
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