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What’s the outlook for the Australian property markets for the rest of 2020 and into 2021?

This is a common question people are asking now that our real estate markets are working their way out of the effects of the Coronavirus Pandemic and out of Australia’s first recession in 30 years.

I guess they’re looking for property market prediction or forecasts – they’re wanting to know what’s going to happen to real estate prices moving forward.

Well forecasting is difficult – especially about the future – but in this detailed article I’ll explain what our research suggests is ahead for Australian house prices in the next decade till 2030.

Forecasting

But let’s start with the current economic climate. It’s been a weird recession hasn’t it?

We’re in the middle of a worldwide pandemic, unemployment is high, yet our housing markets have remained resilient.

In fact there are increasing signs that the modest coronavirus induced housing correction came to an end in the middle of October 2020 and that our housing markets are on the move again.

There has been a palpable change in market sentiment on the ground and this is reflected in strong buyer activity at a time when there is a little good stock on the market.

Here are some of the indicators suggesting we have passed the bottom of this property cycle:-

Consumer confidence has been gradually improving, as has business confidence
Auction clearance rates have been consistently strong, not just in the two big auction capital of Melbourne and Sydney but around Australia.
More buyers and sellers are in the market and transaction numbers have increased considerably.
At the same time the banks are keen to write new business – another positive for our housing markets.
Bank loan deferrals have been falling – there’s little likelihood of an avalanche of forced mortgagee sales
The recent rate cut and the “guarantee” of rates remaining low for at least 3 years, will give home buyers and investors confidence
Moving forward further jobs creation, consumer confidence and business confidence (leading to spending and employment) will underpin our housing markets.

Just to make things clear…we’re not going to fall off a fiscal cliff as some naysayers predicted.

And there is no Australian property bubble that’s about to burst as those perma bears keep telling us.

Quite the opposite – there is a perfect storm of positive factors developing for our property markets next year – a confluence of multiple growth drivers which will propel our property markets into 2021 and 2022.

ANZ Bank economists recently said their initial house price forecast on the decline of 10% from peak to trough has proven too pessimistic.

Instead they are forecasting price gains of around 9% across Australia’s capital cities next year.

While there are still many challenges ahead for our economy and our property markets, there are many reasons to be optimistic about certain segments of the Australian property market, particularly in the long term, as I will explain in this article.

Anz Forecast

Source: ANZ Bank