Good news for retirement village and land lease operators waiting on residents to sell the family home.
The bank has scrapped its prediction of a 10% fall in house prices on the back of COVID and is now saying that the increasing positive sentiment based on economic stimulus measures and record-low interest rates could even see some growth by the end of the year.
House prices are now likely to rise by almost 9% in 2021 thanks to the return of owner-occupiers to the market, particularly first home buyers, ANZ states.
Perth is expected to be the big winner with prices forecast to climb by 12%, followed by Brisbane at 9.5% and Hobart at 9.4%. In Sydney and Melbourne, where prices have been more impacted by foreign investors and international students, prices are tipped to rise 8.8% and 7.8% respectively.
“Our view that house prices would decline around 10 per cent, peak-to-trough, has proven too pessimistic: low rates have trumped factors like elevated unemployment and low population growth,” ANZ Research senior economist Felicity Emmett and fellow economist Adelaide Timbrell said.
The pair say this momentum will continue as policy and lending support moderates 2021 labour market risks.
“Owner-occupiers, and particularly first home buyers, are driving the market. Clearly a significant cohort of buyers with stable employment are keen to take advantage of historically low interest rates,” they write.
ANZ’s rewrite follows the Commonwealth bank’s revision of its predicted decline from 10 to 12% to 6%.
