Combining record low interest rates, income tax reductions, a more positive economy outlook with the Reserve Bank predicting the economy to recover in 2020, has ANZ Bank’s economists now believing house prices will be growing by more than 12 percent per annum by the middle of next year.
House prices have been on the rise since 2012 with Sydney up 75 per cent to 2017 and Melbourne up 58 percent and then there was a price fall. However, if this forecast comes true, it will be a remarkable turnaround and would effectively wipe out the price falls experienced from 2017 to the start of this year where Sydney fell 15 per cent and Melbourne fell 11 per cent.
Throughout the price falls, we had always believed the market would recover and were advising our clients of this, however no one was predicting such a price recover as what the ANZ released last week saying they believed the Sydney and Melbourne market would be up 3 per cent this year and be growing at 12 and 13 per cent annually by the middle of next year.
Even if the property market fell a little short of the ANZ’s forecast for 2020, it still would be a great result for investors and owners, as it now looks like it is only a matter of a short amount of time for prices to return and then surpass 2017 record levels with the ANZ predicting they expect price growth to settle to a healthy 7 per cent for Sydney and 9 per cent for Melbourne by the end of 2020.
Felicity Emmett, ANZ senior economist said the property markets are rebounding faster than expected in Sydney and Melbourne.
“Auction clearance rates bottomed out in December and have been rising since. But the improvement became much more marked from May onwards,” she said.
“The change in sentiment was driven by the combination of lower rates, easier access to credit, and increased certainty around housing taxation. Together, these factors have helped to shift sentiment from one of pervasive negativity to broad optimism.”
With the property prices in Sydney and Melbourne set to rebound faster than forecast, now is definitely the right time to give the team at Plan Assist a call to discuss the best way to secure your next property investment.