Following a projection of negative figures with the expectation that the national house price index would fall 10% between April and June 2021, Westpac Economists have revealed a revision in their predictions, with the real estate sector seemingly holding out through Covid-19.
Updated forecasting suggests the national price index will only drop 5% within the April and June 2021, with prices then expected to soar from December 2021. A much stronger rebound is anticipated, accumulating 15 per cent over the two years from December next year.
Westpac Economist Bill Evans suggests the property price trends can be broken to four phases: our first phase has passed, with house prices nationally having declined 2.3% following the effects of Covid-19. The next phase which we are currently in, Evans suggests that apart from Victoria, nationally property prices will remain relatively stable with some upside pressure during the upcoming December and March quarters. Following this, the June and September quarter for 2021 will see markets having to deal with $240 billion in deferred loans, however, Evans believes this will be well managed with restructuring of loans and added patience from banks, resulting in less downward pressure on prices as previously forecasted. In the final phase, a positive environment for the housing market is expected, a result of interest rates being at a record low, the overhang of deferred loans being no longer, and a view that the central bank and government will be focused on the economy instead of constraining bank lending over regulation, and this is what is predicting the rise house prices for December 2021.