ANZ REPORTS RECORD HIGH CONFIDENCE IN THE PROPERTY MARKET
The Australian property market continues to grow from strength to strength in 2021, as more and more people believe in the promising economic growth showcased to start the year, and forecasts of continued growth into the future.
The Big 4 Banks continue to revise their predictions in consistently more positive fashion, with ANZ predicting growth in the realm of 17% alone in 2021, up from the previous prediction of 9%, with Westpac predicting 15%, up from 10%, and Commonwealth Bank predicting 10%, up from 8%.
Whichever way you look at it, the property boom is being backed to continue throughout the next year at least, with no signs of slowing down anytime soon.
Outlook for Property Prices at Record High in All States
This positive sentiment, however, is not just held by our institutions, with the most recent ANZ-Property Council Survey reaching a new all-time high, surpassing its previous 2013 peak, with confidence in the residential sector leading the charge. These record-high expectations for price rises come after prices rose across the nation by 2.8% in March, representing the strongest gain seen since the 1980s.
Record High Sentiment in Market
Also contributing to this confidence in the residential housing market is the new record high in economic growth expectations, with a net balance of 50% of respondents expecting our economy to expand over the next year, surpassing the record of 41% previously established in September of 2013. This 50% response further encapsulates the strength of the Australian economy, as at the same time last year, the nation hit a record low of -88%.
ANZ Senior Economist, Felicity Emmett has stated that “the combination of record low mortgage interest rates and targeted stimulus is clearly supporting the housing sector, where confidence is now at record levels. Price expectations are at all-time highs, while the HomeBuilder scheme, along with state and federal government initiatives, has brought forward a large chunk of demand.”
With many concerns regarding how the property market and the economy would recover amidst the peak of the pandemic in Australia last year, Emmett also noted that this increased demand “has more than offset the impact from low population growth and elevated unemployment.”
Economic Growth Expectations at Record High
Based on the unwavering strength of the property market throughout the peak of the pandemic, and the strong economic recovery hereafter, these expectations for continued growth in the residential market and economy, in particular, bode well for potential investors to capitalise on a real roaring 20’s type boom.
If you wish to discuss how you could get involved in the property market today, request a bespoke 1:1 consultation with one of our Senior Property Coaches below, where we can dive into your specific financial situation, to tailor a plan that will best suit you.
CLAIM YOUR FREE STRATEGY SESSION BELOW
WESTPAC: HOUSING BOOM WILL SEE PRICES SPIKE 15% IN 2021
Big four lender Westpac has revised its property price forecasts, tipping values to rise 15% in 2021.
The bank had previously predicted prices would rise 10% in 2021 and again in 2022 but changed its tune today.
With the market booming, Westpac said much of this growth would be seen this year, before slowing to grow by 5% next year.
Westpac economists Bill Evans and Matthew Hassan said the housing market had started the year well ahead of expectations, and the rapid pace is unlikely to fade anytime soon.
“Some moderation is likely, particularly as affordability becomes more stretched for owner occupiers,” they said.
LOW RATES HAVE MADE IT CHEAPER TO BUY THAN RENT SAYS NAB BOSS ROSS MCEWAN
National Australia Bank says bargain-basement mortgage rates have made it cheaper to buy a home rather than rent.
The nation’s largest business bank has revealed surging house prices are being felt across the country as more homebuyers look to lock in rates at historical lows.
NAB chief executive Ross McEwan said 16 per cent of lending was coming from first-home buyers capitalising on rates and government schemes to gain access to the property market.
He also flagged it had become cheaper to buy a house than pay rent, with demand for first-home-buying lending at its highest in more than a decade.
WHY REGULATORS AREN’T ALARMED BY THE HOUSING BOOM…YET
It’s sometimes said credit is the oil that greases the wheels of commerce and economic activity. So, what do you do when you want to slow things down a bit? You throw some sand in the gears.
Whether the red-hot housing market needs this treatment is an important question facing financial regulators, who are committed to keeping interest rates low for years, but also wary of allowing the property market to overheat.
For as long as the current boom continues, expect to hear plenty of discussion about whether authorities should start putting the brakes on mortgage lending – something the Reserve Bank of Australia (RBA) has previously dubbed putting “a bit of sand in the gears.”
Such a move could include capping certain types of lending, or changing the interest rates at which banks must assess prospective customers. Any changes of this sort could have major implications for the property market and the availability of credit.