ANZ, NAB and Commonwealth Bank have all now ditched their gloomy forecasts for Australia’s housing market as conditions continue to improve post-COVID.
ANZ has thrown out its prediction of a 10% fall in prices in favour of a 9% rise in 2021 as owner-occupiers, particularly first home buyers, return to the market in the wake of economic stimulus measures and record-low interest rates.
Perth is tipped to come put on top with prices forecast to rise by 12%, followed by Brisbane at 9.5% and Hobart at 9.4%. In Sydney and Melbourne, where prices have been hit harder by the departure of foreign investors and international students, prices are expected to increase 8.8% and 7.8% respectively.
NAB has revised its forecast 15% decline too, saying that a jump in positive sentiment could see prices increase by 5% in 2021.
NAB chief economist Alan Oster said that activity in the housing market has held up substantially better than expected.
“We expect that lower interest rates for an extended period will be a key support to the housing market over the next couple of years, seeing a boost to prices across the country,” he said.
The bank projects Melbourne’s house prices will grow by 3.6% over 2021, and Sydney’s by 4.4%.
Last month, Commonwealth Bank – the country’s largest mortgage lender – kicked off the changing predictions, dropping its expected decline from between 10 and 12% to just 6%.
It is welcome news for retirement village and land lease operators relying on potential residents to sell their home and buy in.