The market has turned in favour of sellers according to Pete Wargent, COO of BuyersBuyers.com.au.
Mr Wargent says that the housing market landscape has shifted quickly over the past three months, with prices now rising across the capital cities and buyer sentiment surging.
"Enquiry has picked up strongly over the past six weeks, initially from first homebuyers, but now also from investors," said Mr Wargent.
"We expect to see a strong 2021 for housing, with more and more investors coming back into the market.
"With investment loans now available in the 2 to 3 per cent range, comparatively speaking yields are now looking more attractive in many areas," Mr Wargent said.
Doron Peleg, CEO of RiskWise Property Research said that the group's latest quarterly forecasts reflected the improved market conditions, stimulatory settings, and the successful containment of COVID-19 in Australia.
"While some risk areas of the market remain, especially in some of the oversupplied unit segments of the market, overall, 2021 is set to be a strong year of capital growth in Australian property," Mr Peleg said.
According to the quarter four 2020 Risks & Opportunities Report by RiskWise the housing market has shifted rapidly, some of their key findings include:
House price growth versus interest rates
With low availability of quality stock in popular areas and increasing demand reflected by increasingly robust auction clearance rates, it is projected that both Sydney and Melbourne will deliver capital growth in the range of 8-12 per cent in 2021. New highs for housing prices in Sydney and Melbourne are again on the horizon.
Houses versus units
Houses with a high land value and scarcity value are likely to enjoy strong demand and capital growth, both in the short and long term.
RiskWise's market research shows that some sectors of the housing market continue to represent a high risk, in particular, inner-city apartment markets as Australians look to avoid the higher density locations.
New peaks for Sydney and Melbourne are on the horizon and housing affordability is likely to deteriorate again.
According to Westpac-Melbourne Institute, housing market sentiment surged in September and October, along with a sharp increase in Westpac's House Price Expectations index, which lifted in September and October by 21.7 and 31.5 per cent, respectively.
The Westpac Consumer House Price Expectations Index tumbled 51 per cent in April in the first stages of the national lockdown. Yet more recently in October, Westpac's key measure of house price expectations has risen strongly.
All states have registered impressive recoveries. This followed a surge of 21.7 per cent in September.
It should also be noted that the recovery through the COVID-19 pandemic is another demonstration that property is a long-term game and that houses and family-suitable properties in the larger capital cities tend to recover well after each major downturn.