Westpac Claims House Prices To Go Up Again In The Coming Year
- Posted By Pasang Sherpa
The second biggest bank of Australia is hinting towards a spike in the housing prices all over Australia. The property forecast of Westpac has expected the property market to remain unharmed even through this global pandemic before taking a leap of 20% increment in following years.
Chief economist Bill Evans and senior economist Matthew Hassan had predicted a drop of 10% price in the property market and had expected a recovery of 8% by 2022. However, the resilient and confounding property market disproved their prediction as national prices will eventually decline by 5%, or a further 2.3% on top rather than a predicted 10%.
The price drop in the market however is calculated to differ by city. Melbourne being harshly affected by the pandemic and the fact that the city is still in a state of lockdown, the city is expected to shed 12%, which is trailed by Sydney with a 5% drop and 2% price fall in Brisbane. Property prices in Perth is not expected to fluctuate which means the city will have a stable property market. Adelaide is expected to stand out from all the cities with an increment of 2% in terms of property prices.
The predictions made by Westpac appears to be the most optimistic amongst the other major financial institutions. Commonwealth Bank has expected the fall of 6% in price with a recovery expectation less than half of what is expected by Westpac. ANZ Bank has expected a fall of 15% in property prices which is the highest amongst all the other banks.
Expecting a modest price fall Westpac is bidding on the spectacular rejuvenescence of the market in the future. It is expected that a series of distressed selling will occur after the end of mortgage deferral in March which will free the market of outstretched borrowers and prices will decline. However, after the calm of this storm the market is expected to boom. Evans and Hassan also claimed that the comeback of the property market will be aided by sustained low rates, which have a higher chance of being more low than present rate. Continued support from the state and federal government, regulators and a recovering economy will be key factors for the uprising of prices in the property market.
To be more specific a total increment of 14% in Sydney, 12% in Melbourne, 20% in Brisbane, 18% in Perth and 10 % in Adelaide can be expected.
Source:
Derwin, J., 2020. Business Insider Australia. [Online]
Available at: https://www.businessinsider.com.au/property-prices-forecasts-australia-westpac-affordability-coronavirus-2020-9
[Accessed 18 09 2020].