Home values are starting to stabilise just six months after the March COVID-19 shock which has some economists forgoing their gloomy outlooks for a more upbeat attitude.
In April the CBA forecasted that house prices would fall by 10% nationally, an optimistic view compared to the consensus, which was showing tragic price drops of between 10% and 30%.
At present, The CoreLogic indices show that six months following the pandemic shock, housing prices are gradually beginning to stabilise and/or climb again in Sydney, Canberra, Adelaide, Brisbane and Perth.
“We are now looking for a national peak-to-trough fall of 6 per cent versus our previous call of 10 per cent,’ said CBA’s economists as they are forecasting “solid price growth in the second half of 2021 as the economic recovery gains traction and incredibly low interest rates once again become the dominant influence on dwelling prices,” while the Reserve Bank Australia still believes the national prices will continue to ease.
A healthy increase in house prices next year will be a boost for the stamp duty revenues collected by the state governments and will also be extremely beneficial for consumer confidence for household spending.
This is a brief summary of the article ‘House price bears are turning bullish’ by Christopher Joye | AFR – Australian Financial Review | Friday 11th September 2020