After considering their initial view of a 10 per cent housing drop “too pessimistic”, ANZ economists now feel that the housing market bottomed out last month, and will rise throughout 2021.
‘Australian housing: a strong 2021’ credits the forecast price rise to owner-occupiers, with low interest rates attracting those with secure employment – both first home buyers and upgraders.
The report suggests that October 2020 was the nadir of the price cycle, and predicts that prices will rise by roughly 9 per cent throughout 2021.
“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 economists Felicity Emmett and Adelaide Timbrell said.
The price drops were most pronounced in Sydney and Melbourne, with Brisbane and Perth seeing a slighter dip and quicker recovery, and Canberra, Darwin, Hobart and Adelaide continuing to rise throughout 2020
“Government income support and the deferral of home loan repayments have also helped support the market,” Ms Emmett and Ms Timbrell noted.
“The RBA’s recent rate cut, the further decline in fixed mortgage rates and the prospect of low rates for some years will all add to the momentum currently in the market.”