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The housing market is said to be “on the cusp of a boom” with record low mortgage rates now colliding with the recovery in the jobs market, according to economists at Australia’s biggest bank.

Commonwealth Bank economists are predicting an 8 per cent rise in national dwelling prices this year, followed by a 6% increase in 2022, backed by the recent figures from CoreLogic that showed prices had risen by 0.9 per cent in January.

According to CoreLogic, Preliminary figures from last week’s auctions put the clearance rate for the capital cities at 86.1 per cent.

After previously predicting an 11% fall in house prices over three years, the ‘base case’ pandemic scenario, CBA economists revised their property price forecasts last year.

“But even then, the rapid growth in new lending over the second half of 2020 was stronger than we anticipated.” Said CBA’s head of Australian economics Gareth Aird.

City Dwelling price forecast over two years to December 2022
Sydney                 +13.7%
Melbourne                 +12.4%
Brisbane                 +16.6%
Adelaide                 +15%
Perth                 +17.7%
Hobart                 +15.5%
Darwin                 +18.7%
Canberra                 +15.5%
Combined capitals                 +14%

 

Source: CBA

This content is derived from the article ‘ASX gains as JB Hi-Fi profits surge; Commonwealth Bank forecasts house price boom’ by Stephanie Chalmers | Monday 15th February 2021.