Australian Housing Prices Forecast To Rise 20 Per Cent
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Australian Housing Prices Forecast To Rise 20 Per Cent

One of Australia’s leading economists predicts the early makings of a property boom.

By Terry Christodoulou
Tue, Feb 23, 2021Grey Clock < 1 min

One of Australia’s big four banks is forecasting 20 per cent gains in the housing market over the next two years.

The incredible figure comes out of Westpac’s first Housing Pulse report for 2021 and indicates Australian dwelling prices could be on the brink of a boom.

The banking institution’s chief economist Bill Evans stated in the report, released on Monday, that he was expecting dwelling prices to lift 10 per cent nationally in the next 12 months, with that pace continuing into 2022, citing strong economic growth as the cause.

“The upturn is being supported by record low-interest rates; the confident expectation among borrowers that these rates will remain low for years to come; ample credit supply; and an improving economic backdrop,” Evans said.

In the final quarter of 2020, dwelling approvals surged 22 per cent while lending for dwellings lifted by 16 per cent in the December quarter.

Smaller capital cities and regional towns were likely to capitalise on the forecast increases, however concerns linger around the Sydney and Melbourne high rise markets.

Further, Evans has foreshadowed good news for the labour markets with unemployment rates forecast to decline steadily to 6 per cent by end of 2021, and 5.3 per cent by the end of 2022.

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New research from Knight Frank’s International Waterfront Index shows waterfront properties are costing more than double their inland counterparts in Sydney while in Melbourne waterside properties attract a 40% premium.

Australia’s coastline attracts some of the highest waterfront premiums in the world with Sydney topping the index — an average premium of 121% — compared to an equivalent home set away from the water.

Auckland ranked second on the list of 17 international locations — a premium of 76%. The list saw Gold Coast (71%), Perth (69%) and the Cap d’Antibes (59%) on the French Riviera round out the top 5.

Australia continued to feature prominently in the research with Brisbane’s waterfront premium coming in at 55%, with Melbourne also in the top 10 at 39%.

According to Knight Frank Australia’s head of residential research, Michelle Ciesielski, there has always been strong appetite for Sydney’s waterfront homes.

Australia’s luxury residential market has advanced, it lacks the depth of prestige markets in more established global cities said Cieselski.

“As a result, our Australian cities can achieve a significantly higher premium on the waterfront compared to a similar property inland without access to, or a view of, water,” she said.

“Also, Australia is known for its balmy outdoor lifestyle, so many buyers in this super-prime space are willing to pay a premium to secure the ideal position along the waterfront.”

The data also suggests that beachfront homes were most desirable, commanding a premium of 63% compared to harbour locations fetching 62% premium and coastal homes with a 40% premium.