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ANZ predicts 20 per cent house price surge in Melbourne for 2021
Source: | Author:pro01a30d | Published time: 2021-08-27 | 1592 Views | Share:

Melbourne house prices will surge 20 per cent across 2021, despite the city enduring four lockdowns since January 1, ANZ has predicted.

But Victoria’s peak real estate body has warned homeowners not to temper their expectations.

After strong price growth so far this year, the big prediction from ANZ has been revised upwards from March when they tipped 16 per cent growth for the year.

In an Australian housing report released yesterday the nation’s third biggest bank noted it was expecting growth to slow in the back end of the year.

But senior economist and report author Felicity Emmett said much of the growth had already happened, with the bank’s figures showing an average 1.6 per cent rise in prices every month this year — and a 1.8 per cent increase in July.

“We do acknowledge that there are downside risks from the current Delta wave, and there is a chance that prices could come in lower,” Ms Emmett said.

“But at the same time, there’s a chance that prices are a bit stronger than we think, given how strong the year has been.”

The report identified growth in housing finance data and rising investor lending as likely to underpin continued rises, but noted increasing issues with affordability would reduce the number of first-home buyers.

It also shows that even in the second half of August house prices were rising more than 0.25 per cent a week, about $2000 a week for an $800,000 property.

Real Estate Institute of Victoria vice president Adam Docking said while “achievable” he didn’t think the market would move that much.

“With the number of lockdowns that Victoria has had I wouldn’t be confident with the data they will have to project that,” Mr Docking said.

Noting that the repeated lockdowns had caused spikes and lulls in activity, he said there was certainly “strong and steady” growth occurring as buyers viewed the market shutdowns as a “hiccup in their quest to buy a property”.

“A lot of people have bought and need to sell, or have sold and need to buy,” Mr Docking said.

“So there’s pressure on the buying public, and that’s almost exponentially increased by lockdowns. So we will see, and have seen, price growth when we have a snap opening.

“But 20 per cent, to me that’s just a figure. I don’t think anyone can project a percentage this year.”

Mr Docking also advised homeowners to be aware that high growth in outer suburbs and the Mornington Peninsula, driven by a rise in working from home, had not been replicated in equal measure around the city.

The ANZ has tipped Melbourne’s growth to continue into 2022, when an about 8 per cent rise is likely to top every other capital — except Perth where there are similar expectations.