Property Price Growth Predictions for 2021
Will property prices continue to climb? Hard to imagine, isn’t it? However, here is a chart that shows the causation between the annual change in housing finance and the annual change in property prices in Australia (provided by Matusik).
Back in May, Matusik suggested that if the relationship between housing finance and property prices played out that property prices could rise by 14% for the 2021 financial year. However, reported property price growth to the end of June 2021 rose by 18.8%. Pretty phenomenal!
He then highlights where we might see price growth reach in September, suggesting 25% nationally, and then by the end of December 2021, as much as 38%. Wow! I would think that something has got to give to slow this trend down however all current signs indicate otherwise.
On the Sunshine Coast, we’ve experienced property price growth above the national averages. As a lifestyle destination and a market that presents to many interstate residents’ “affordability” the demand for property in our region is not showing any signs of slowing soon. This is fuelled by the changes in the way we do things, both work and life, and of course, the continuing lockdowns in our southern states of NSW and Victoria. Plus, many other exciting things are happening here on the Sunshine Coast and in South-East Queensland that will no doubt put us more on the map as a destination to live.
Tim Lawless from CoreLogic at the start of 2021 suggested property price growth on the Sunshine Coast would outperform our capital cities. He predicted prices in our capital cities would rise by 5% and in regional areas as much as 10%. In a recent article by the ABC, Mr Lawless noted that to the end of July house prices on the Sunshine Coast on average increased by 25%. Much higher than Brisbane, sitting at around 15.9% and the national average of 16.1% (as reported by CoreLogic).
So, if what Matusik suggests becomes reality and property prices rise in Australia by 38% before year-end, then prices on the Sunshine Coast could rise as much as 50% in 2021. The major banks are mostly predicting a strong finish to the property market in 2021 with a slowing or declining market in 2022. Westpac and ANZ predict that house price growth for 2021 will end at 18% and 17%, respectively. Their current forecast for 2022, suggests a possible 5% or 6% increase.
If only we had a crystal ball! Whatever the case, from our end the market appears to be about to change, with more property owners choosing to sell now before the unknown becomes reality.