Property prices could rise 17%: Which city will be cheapest by 2022?
If predictions are accurate, Sydney's median price will pass $1.1 million and Darwin's will be over $500,000.
In a recent report, ANZ economists predicted Australian property prices to rise 17% across the nation's capital cities by the year's end.
The report predicts the strongest growth for Sydney and Perth, at 19%. If these predictions prove accurate, the only capital cities with an average price below $600,000 will be Darwin and Adelaide. Darwin would have the lowest median price among Australia's state and territory capitals at $523,633.
Using CoreLogic median price figures for March, we can apply these predicted increases to see just how much prices could rise in 2021.
Here's a quick breakdown by city.
Property price predictions by December 2021
|City||CoreLogic median||Predicted rise*||Price by end of 2021|
Sources: Post-COVID house prices leave 2020 behind, ANZ; CoreLogic Home Value Index, 1 April 2021
Of course these are just predictions from two economists at one institution. As we saw in 2020, a lot of unexpected things can happen in a year. But conditions seem likely to encourage growth for some time.
Interest rates on home loans have never been lower. This has driven borrowing costs down and boosted property buying. And home buyers have been the ones driving this growth as investor activity is still sluggish. If investors return in larger numbers prices could grow even further.
In the report, the ANZ economists said they expect price growth to slow by the end of the year as "regulators will step in with macroprudential controls to address the overheating market." While that could happen, APRA chair Wayne Byres told a business forum recently that price growth alone won't prompt a lending crackdown.