Australian house prices to rise

Australian house prices to rise

• Posted By David Brown

By the end of the year, Australian housing prices will rise 15 percent before slowing to just 5 percent in 2022, a new Westpac Housing Pulse has revealed.                                                                     

The market is showing strength with a 30 percent turnover, which is 8.5 percent more than the pre-COVID peak. Everyone is hoping for the tiniest moderation to this boom, but nothing convincing has materialised and it doesn’t seem to be cooling down anytime soon.  This means that homebuyers might not be able to purchase a property and such a vigorous price increase would affect people’s ability to service their loans.                                     

Australian house prices could rise 10 times as fast as wages in 2021. The Reserve Bank and the Australian Prudential Regulation Authority (APRA) shown concern when property prices rose by 15 percent. 

That is why WESTPAC expects some measure of intervention to be taken next year, which could include tightening of loan to value ratio or a cap on investors' growth.               

Price gains are happening in all of the Australian major cities especially Sydney. A Finder RBA Cash Rate Survey of 40 economic experts revealed the average house price could rise by 21 percent in Sydney -- or 216,300 in 2021 which would be the highest annual increase for Sydney’s property market eclipsing the previous mark of 15 percent in 2013.

Housing prices are projected to jump by a staggering 17 percent in Brisbane, or by $98,770, while Melbourne is projected at 15 percent, or by $120,900 by year-end.    

While price raises are still predicted for the rest of the year, challenges remain, the continued closure of Australian International borders to new immigrants will affect the Australian property market, also we have slower population growth and sharply lower demand for new buildings.                                                                                                        

With HomeBuilder predicting many new homes to be built in the next 12 months, Australia could see a rise in vacancy rates. The HomeBuilder supply and demand could see the housing shift away from shortages and that could hit next year.