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 – this is great news for borrowers. Maybe you can do that renovation or extension you’ve been wanting to do. You may even be able to get access to the $25,000 Home Builder Grantto help you with the costs.Both NAB and Westpac economists have been quick to jump on board the rate cut hype train, predicting the RBA could cut the cash rate by 15 basis points to a record low 0.10% as early as October.
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.So if you’re looking to add to your property portfolio, looking for a change of scene, or keen to buy your first home and break into the market, get in touch today by calling 03 8560 5000. You can even perform the process online by filling in our Online Fact Find form.We’re here to help you find a loan that’s just right for you.Disclaimer: The content of this article is general in nature and is presented for informative purposes. It is not intended to constitute tax or financial advice, whether general or personal nor is it intended to imply any recommendation or opinion about a financial product. It does not take into consideration your personal situation and may not be relevant to your circumstances. Before taking any action, consider your own particular circumstances and seek professional advice. This content is protected by copyright laws and various other intellectual property laws. It is not to be modified, reproduced or republished without prior written consent.