Melbourne home prices to rise 18 per cent in two years: Westpac
Melbourne’s house price is predicted to grow 18 per cent over the next two years.
Melbourne home prices are forecast to surge 18 per cent over the next two years.
Big-four bank Westpac yesterday released a property market forecast predicting a sustained housing boom.
They estimate an 8 per cent in dwelling values across 2021 and a further 10 per cent in 2022.
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It’s a remarkable turn around after other major lenders were tipping home prices to crash as much as 30 per cent in worst case scenarios as COVID-19 hammered the nation’s economy last year.
The bank is now expecting mortgage holidays coming to an end will have less of an impact than first feared, with 120,000 housing and small business loans being deferred in December last year, down from a 630,000 high in May.
Despite the predicted boom, Melbourne would be one of the nation’s worst performing capitals — with a nationwide 20 per cent growth average flagged over the next two years.
Only Hobart is expected to see lower gains at 14 per cent, while Adelaide would equal our growth at 18 per cent.
A surge in new apartments being completed in Melbourne’s CBD are not expected to substantially impact wider growth figures across the city. Picture: Tony Gough.
The report by Westpac chief economist Bill Evans and senior economist Matthew Hassan concluded that Australia’s “housing upturn now has strong momentum that looks to be lifting further and will remain well supported by monetary conditions and an improving economic backdrop”.
Their report warned there would still be short-term pain for investors while international migration remains stagnant, putting a strain on rental markets where there is an oversupply of homes.
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They do however anticipate tweaks from the government or its agencies could slow the market again in 2023.
Realestate.com.au chief economist Nerida Conisbee said while she agreed the coming six months could see major gains, and potentially up to 10 per cent over 12 months, growth would likely moderate next year.
“Melbourne has really shrugged things off,” Ms Conisbee said.
“But from next year things will calm down, particularly when people are travelling again and finding other ways to spend their money.”
Some parts of Sydney and Melbourne could achieved 20 per cent growth over the next two years, she noted.
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