ANZ Tips Big Rises In Big City Prices

Posted on 27/10/2019  
ANZ Tips Big Rises In Big City Prices

Sydney and Melbourne house prices will be growing at an annual rate above 12% by the middle of next year, one of the nation's largest banks has forecast.

Economists with the ANZ believe a change in sentiment, along with easier finance, cuts in interest rates and the Federal Government's income tax reductions, will super-charge Sydney and Melbourne, wiping out the losses from recent price falls.

ANZ predicts that by the end of this year, Sydney and Melbourne prices will be up by 3%. By the middle of next year, they will be growing at an annual rate of 12% and 13% respectively.

By year's end, a combination of tighter credit and improved supply will mean price growth will come back a little but will still be 7% in Sydney and 9% in Melbourne.

ANZ senior economist Felicity Emmett says the property markets of the two cities were re-bounding much quicker than expected.

"Auction clearance rates bottomed out in December 2018 and have been rising since,” she says. “But the improvement became much more marked from May onwards.

"The change in sentiment was driven by the combination of lower rates, easier access to credit, and increased certainty around housing taxation. Together, these factors have helped to shift sentiment from one of pervasive negativity to broad optimism."

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