Strap yourself in: Australian house prices are tipped to experience a mild COVID-19 dip before surging 15% over the following two years, according to some of the nation’s top economists.
And in more good news for homeowners, RBA Deputy Governor Guy Debelle has hinted at further reductions to interest rates, while not going into negative territory.
But back to that tipped 15% price surge
Westpac’s Chief Economist Bill Evans and Senior Economist Matthew Hassan believe house prices are set to bottom out by June 2021 after a further 2.3% fall – which would mean a total fall of 5% from the peak in April.
But the good news is they’re tipping prices to bounce back hard and fast across the country.
Indeed, the duo expects national dwelling prices to “surge” 15% until mid-2023, or 7.5% per year, led by massive gains of 20% in Brisbane and 18% in Perth.
Sydney (14%), Melbourne (12%) and Adelaide (10%) wouldn’t miss out on the action, either.
If it plays out as predicted, we could see a cumulative increase in national prices of 10% from pre-COVID highs over a three year period.
“This recovery will be supported by sustained low [interest] rates, which are likely to be even lower than current levels,” Mr Evans says.
Such a rebound would also be assisted by ongoing support from regulators, substantially improved affordability, sustained government fiscal support, and a strengthening economic recovery.
Mr Evans adds the recovery would be further aided “once a vaccine becomes available, which we expect in 2021″.
Got your eye on a property?
For those who are confident in their financial circumstances at present, Westpac’s housing market prediction certainly makes it a tempting time to buy, especially if another RBA cash rate cut soon comes to pass.