Multiple sources are forecasting strong performance in property markets across Australia in 2020.
HSBC economists are forecasting national house prices to rise 5–9% in 2020 – an increase on their previous forecasts of 0–4%. Increased confidence, due largely to relaxed lending criteria and lower interest rates, led to an improved market from June onwards and that is tipped to continue.
Paul Bloxham, HSBC’s chief economist for Australia, says the main reason is an increase in demand from buyers. “We expect housing prices to continue to rise in 2020, underpinned by mortgage rates, which are likely to stay low for a considerable period of time,” he says.
Other major sources, including Commonwealth Bank and SQM Research, have recently forecast strong price growth across the major cities of the nation in 2020.
Forecasts by SQM Research’s Housing Boom and Bust Report for 2020 indicate that most capital city house prices will rise in 2020.
SQM Research managing director Louis Christopher says Brisbane’s improving economic outlook will benefit the housing market with Brisbane’s home prices forecast to increase by up to 7%.
The forecast is for Sydney home prices to rise between 10–14% and Melbourne prices to jump by 11–15%.
But while Sydney and Melbourne home values are set to rebound, Christopher says he doubts the sustainability of the recovery in those “overvalued” markets. “Brisbane is definitely offering better value for money for those who decide to move from Sydney to Melbourne,” he says.
Elsewhere, Hobart prices could rise by 8%, Canberra 7%, Adelaide 4% and Perth 6%.
Only Darwin will keep falling, as its economy continues to struggle.
Meanwhile, national developer Mirvac says the market downturn in the two biggest cities is over its worst phase and beginning to recover, with an increase in sales expected in 2020.
Mirvac chief executive Susan Lloyd-Hurwitz says home sales inquiries have increased across all of Mirvac’s projects and that there were “now clear signs of improvement” in the Sydney and Melbourne residential markets.
Mirvac has moved into its next phase of residential development, buying new land sites in Sydney and Melbourne.
New research from the Commonwealth Bank Household Spending Intentions survey confirms that monetary policy stimulus is working and consumer confidence in real estate is rising.
It also reveals that home buying intentions rose further in October and are now close to the record highs seen in 2017. It says that CBA Home Buying HSI levels are consistent with an ongoing pick-up in dwelling prices.
CBA chief economist Michael Blythe says: “Lending over the four months to September grew at an annualised pace of 52%. And that certainly looks fast enough to give some boost to housing credit outstanding”.
Consistent house price increases are spurring on confidence in the national housing market, according to new research.
ME’s Third Quarterly Property Sentiment Report has found that 42% of Australians in the property market feel positive about it (up 9 percentage points) and only 24% feel negative (down 2 percentage points).
The report found that more Australians are willing to get back into the property market after a period of sitting on the fence, with more intending to buy (up 2 percentage points); more intending to sell (up 4 percentage points), and fewer intending to do neither (down 4 percentage points).
Respondents across all major cities have a positive outlook on prices, with the exception of Western Australia.
In the three largest capital cities, prices are expected to continue to rise, with 57% of respondents forecasting positive price movements. This positive sentiment is approximately 10 points higher than the overall sentiment for the country.