The Westpac bank is predicting a 20 per cent surge in Australian property prices during the next two years which would see Sydney house values surge $200,000.
Australia’s second biggest bank said record-low interest rates of just 0.1 per cent would see capital city real estate values rise by 10 per cent in both 2021 and 2022.
A 20 per cent increase would see Sydney’s median house price surge by $207,000 during the next two years from an already expensive $1.034million.
The Reserve Bank cut interest rates to a record-low of 0.1 per cent in November and Governor Philip Lowe has repeatedly declared the cash rate will not increase until 2023.
Westpac economists Bill Evans and Matthew Hassan said all-time low interest rates and a strong recovery from last year’s Covid recession would turbocharge the housing market.
The Westpac bank is predicting a 20 per cent surge in Australian property prices during the next two years
‘The bottom line is 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,’ they said.
Sydney and Brisbane house and apartment prices were expected to rise by 10 per cent in 2021 followed by another 10 per cent next year.
Perth was expected to do even better this year with property price increases of 12 per cent in 2021 before a more modest 8 per cent increase in 2022.
Melbourne’s median dwelling prices were expected to climb by a more subdued 8 per cent in 2021 followed by a 10 per cent increase next year.
Westpac is even more upbeat than the Commonwealth Bank, which last week forecast a 14 per cent increase in capital city housing values in 2021 and 2022.