Westpac is the latest bank to soften its house price decline forecast amid a resilient real estate market through the pandemic period.
In April it had predicted 10%-plus falls in prices nationally from the peak in April 2020 to June 2021, with increase of around 4% per annum over the following two years.
But now, with real estate weathering the Covid-19 storm well, Westpac is now forecasting only minor declines between April 2020 and June 2021. And it’s predicting boom-level price rises starting next year.
Senior economist Bill Evans says Westpac has changed its view based on a more substantial boost from a milder than expected recession. Brisbane house prices are expected to surge 20% over two years, while Sydney prices could climb 14%. Melbourne prices are predicted to lift 12%, Perth 8% and Adelaide 10%.
Others including Commonwealth Bank, AMP Capital and NAB have recently changed their price forecasts to more positive outcomes, having originally predicted falls of up to 20%.
Solid market performance around Australia – especially in the smaller capital cities and in regional centres – have proven their original forecasts to be wrong. Commonwealth Bank is now predicting that house prices will rebound strongly.