By the end of this year, Sydney and Melbourne property prices will rise by 3%-and by mid-2020, according to economists from ANZ, they will grow at annual rates of 12% and 13% respectively.
By the end of 2020,
a blend of tighter credit and strengthened supply will mean price
growth will return a bit but will still be 7% in Sydney and 9% in
Melbourne, it says.
“ANZ Research had thought the easing of the mortgage
serviceability floor would be at least partly offset by other
tightening measures such as the updated Household Expenditure Measure
(HEM) and the introduction of comprehensive credit reporting. But
that has not been the case.”
“ANZ Research does, though, see credit conditions remaining
tighter than they were pre-Royal Commission. And this is likely to
constrain the eventual pickup in prices.”
“Meanwhile, declines in house prices over the past few years
have improved a range of affordability measures. The recent sharp
turnaround in prices though will ultimately reduce affordability - in
Sydney and Melbourne in particular. Average loan sizes for first home
buyers are higher than ever.”
“Improved auction results in the two cities have been accompanied by a change in sentiment which hasthe potential to offset the recent price falls”, says ANZ senior economist Felicity Emmett.
For the second time
in two months, Sydney's auction clearance rate remains above 80
percent. ANZ and CoreLogic research shows that this is Sydney's
strongest clearance rates for two years. Emmett says public sentiment
has shifted in recent months from one of pervasive negativity to
widespread optimism.
AMP chief economist Shane Oliver says more buyers and fewer auctions were bolstering the property unit market. As more vendors return to the market, he expects the results to soften out.
See Full Article Here: Property Prices Up Mid 2020
