Due to higher-than-expected house price growth in recent months, NAB raised its forecast for Sydney house prices this year by more than 7 percentage points to 21.6%. The bank also raised its expectations for other capital cities. Melbourne house prices are expected to increase by 17.6%; Brisbane is expected to rise by 19.5%. According to NAB forecasts, housing prices in the combined capital cities will rise by 18.5% in 2021.
We saw the strongest number of home loans ever in June, and the demand was very strong.
— NAB Andy Kerr
A bank economist headed by Alan Oster said, “In recent months, housing price growth has been much higher than expected, so NAB has raised its forecast for housing prices in 2021.” Economists pointed out that at present the closure of the city is expected to have a considerable impact on the economy, but this impact will be temporary. “We remain optimistic that once the restrictions are relaxed, housing trading activity will rebound quickly, just like before.”
Steady growth rate
Australian residential prices continued to grow at a strong rate in June, with capital city housing prices rising by 1.9% this month.
NAB Andy Kerr (Andy Kerr) said that although the closure of the city has brought many challenges to households and businesses, the housing market still maintains a strong momentum.
“Although the current lockdown has affected the lives of many Australians, customers are still interested in buying a home. More than a third of bookings last week were made via video.”
The NAB Residential Property Index shows that the rebound in national housing prices has also lifted the sentiment of real estate agents to a high in the second quarter.
Victoria saw the biggest improvement in sentiment, rising 19% this quarter.
“Given the number and duration of the lockdown we have seen in Victoria before, we have reason to believe that the impact of the lockdown is temporary, and we will soon have a strong and rapid recovery.” Mr. Kerr said.