As Australia gears up for 2021, the immediate prospects for the property market appear extremely positive with housing prices tipped to bounce back.
AMP Capital chief economist Shane Oliver predicts home prices will surge by 5 per cent nationally in 2021 but says inner-city unit prices in Melbourne could fall by as much as 5 per cent.
Home values in every capital city rose in December, for the second month in a row since the pandemic took its toll – with national home values up 1%, according to CoreLogic’s Home Value Index.
Dr Oliver expects the upward trend to continue into 2021, with some capital cities, including Brisbane and Perth, to experience up to 10 per cent growth.
“Overall, I’d expect Sydney and Melbourne to have gains of about 2 per cent, on average across the whole city. But within that, units in inner-city areas will probably go down 0-5 per cent, whereas outer suburbs houses will probably go up 5 to 7 per cent,” Dr Oliver said.
Westpac chief economist Bill Evans said the bank was expecting Australian house prices to rise by 4 per cent in 2021 and by a further 10 per cent in 2022, but also expected next year’s growth to be dragged down by inner-city apartments, largely in Melbourne and Sydney.
Westpac updated its forecasts in late November to predict dwelling prices in Melbourne would grow by 2 per cent in 2021 and 8 per cent in 2022, while Sydney prices were expected to grow by 3 per cent and 9 per cent, respectively.
This compares to other capital cities, where Westpac has forecast dwelling price growth of up to 8 per cent for Brisbane and Perth in 2021. It expects growth in those cities to surge a further 10 per cent and 8 per cent, respectively, in 2022.
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