In what could be good news for investors and developers, Australian house prices are forecast to rise in 2020, particularly along the east coast.
After a significant period of correction carrying through to the first half of 2019, prices will see a 5.4 per cent growth in the next year according to Corelogic and Moody’s 2019 third quarter housing forecast report.
Moody’s economist Katrina Ell says that the numbers show that nearly all markets across Australia will move on from price corrections.
“The national index for home values has fallen for almost two years, before house values began to rise in [Sydney and Melbourne] in the September quarter,” Ell said.
“The RBA has reduced the cash rate by 75 basis points so far this year [with] a further 25-basis point reduction expected for early 2020.
“This could trigger a pickup in the Sydney and Melbourne housing markets that is more aggressive than forecast [and] would likely lead to further household leveraging,” she said.
In Sydney, house prices are expected to jump 7.7 per cent next year and a further 7.6 per cent by 2021.
The majority of this growth will be in the city’s north-western region where houses are forecast to surge by 11.1 per cent in 2020
The region, which includes Baulkham Hills, Dural and Rouse Hill will then grow another 11.9 per cent in 2021.
The outlook for Sydney apartments is also brighter with values predicted to jump by 7.9 per cent next year and another 8.4 per cent by 2021.
Moody’s economist Katrina Ell predicts Sydney home value growth will not be the same gains of recent years, and explains the context of Sydney’s correction.
“House prices in Sydney remain around 60 per cent higher than they were in 2012.
“Housing values have risen at a faster rate than what fundamentals—income, population and interest rates—suggest, and are overvalued relative to the equilibrium value.”
According to the report Melbourne’s house values can be expected to grow 7 per cent in 2020 after a 9.2 per cent fall in 2019.
In Brisbane house prices are forecast to grow 2 per cent in 2020, as the city comes off the back of a more mild correction.
Brisbane apartments face a more positive outlook with values predicted to grow by 5.4 per cent next year.
Across other states it’s a different story: in South Australia house values are expected to fall by 0.5% in Greater Adelaide, they are expected to accelerate in regional South Australia and grow by 1.2% in 2019.
When it comes to units, values in Greater Adelaide are likely to steady, forecast to only rise by 0.7% in 2019.
In Perth, house values are set to drop sharply by 7.8 per cent for 2019. But Moody’s predicts the rate of decline will slow dramatically by 2020, with a fall of 0.7 per cent before rising by 3.1 per cent in 2021.
Image courtesy of Unsplash.
It almost sounds like the beginning of a terribly lame joke, but what do a German beach chair ...
A new opera house and cultural hub in the heart of Düsseldorf city centre in Germany has been ...
This ‘tough’ family home in the heavily dense forests for Mt Coot-tha in Brisbane’s west uses high blockwork ...
Plans for a $180 million “shop top” development on Sydney’s North Shore are set to tap into increasing ...
Roberto Benito Arquitecto has completed Vivienda Texturas – or Textural House, a low-to the ground house in central ...