Despite an economy which is still struggling from the effects of Covid-19, it now appears we another housing boom is upon us.
According to CoreLogic house prices in Australia rose 2.39% for the year ending 31 December 2020, led by the markets of Darwin +11.9%, Hobart +7.7%, and Adelaide +5.9%.
However, according to leading housing commentators 2021 will be much better.
Simon Pressley – Propertyology:
“Numerous locations are likely to go above 20% growth in the calendar year”
Mchael Yardley – Metropol
“Sydney property market forecast to grow strongly in 2021-2022”
“We are forecasting house price growth of 10 per cent to 15 per cent in 2021, a view that many other analysts have slowly come to embrace.”
Louis Christopher – SQM
“average gain of 9 per cent in 2021”
While these forecasts might sound strange in light of weaker population growth, from non-existent immigration and above average unemployment there are other factors which bode well for demand.
For one, the record levels of government stimulus are having a multiplier effect across the broader economy. While the reduction in the cash rate by the RBA to a record low of 0.10% now means debt is now ultra cheap, with many home loan borrowing rates reflecting a rate just above 2.0%. Further, we are now starting to see banks relax some of the lending criteria for borrowers, which has also helped first home buyers.