Federal Treasurer Josh Frydenberg says the rise in house prices is a positive sign for the Australian economy.
Some analysts expect a 15% gain in prices this year, a significant rise from earlier predictions. A year ago, the same forecasters were expecting house prices to fall 20% or more, amid overwhelming pessimism about the economy.
A year on, optimism dominates and that’s good news for the nation. When large numbers of homes are changing hands, multiple businesses are involved, jobs are created and money circulates in the community.
“It’s positive that the price of houses has been going up,” Frydenberg says, ahead of the Federal Budget on 11 May. “It means people are feeling more comfortable in the value of their homes, that’s going to give them greater confidence to spend and that spending will generate economic activity.”
Elliot Clarke from Westpac says the bank’s February forecast for a 10% gain in prices in 2021 will be achieved by June. “While a moderation is likely, a sudden loss of momentum seems unlikely,” he says. “As a result, Westpac now expects a 15% gain in 2021.”
Terry Ryder – May 2021
