Record low interest rates, income tax cuts and an easing of lender restrictions are all having a positive impact on home buyer confidence.
After a remarkable turnaround in the second half of 2019, the property market looks set to reach new highs in 2020.
The latest Australian Housing Outlook 2019-20221 from QBE suggests 2020 will see values rise across many of our state capital cities, supported by strong population growth and a tighter supply of new homes.
How will your city perform?
Sydney’s property market staged a strong recovery in 2019, and 2020 is likely to bring more of the same, with CoreLogic2 predicting that by April, home values in Sydney will be back to their 2017 peak.
The Melbourne market is on track to return to peak values by January 2020 according to CoreLogic, and house values are expected to rise 5.1% by 2022, with the Inner West expected to top the leaderboard for some of the city’s biggest gains in 2020.
The strongest forecast is for Brisbane, where a combination of population growth and rapidly falling supply could deliver house price growth totaling 20.3% by 2022.
Perth’s market downturn arose from a weakening in the resource sector, which saw population growth slow just when new home construction was peaking, leading to an oversupply in the market. Today however, migration to Perth is increasing, and the outlook for the state economy is more positive. QBE believes Perth house values will turn the corner in 2020 and climb 6.0% by 2022.
Adelaide remains one of our most affordable cities though big gains could be in store over the next few years. Already, CoreLogic mentioned that the North and South of Adelaide reached record highs for housing values in 2019, and an improving job market is expected to boost interstate migration. That means greater demand for homes, and QBE is forecasting a 12.7% rise in Adelaide house prices to 2022.
Hobart has seen property prices leap ahead in recent years though QBE expects this to moderate to around 4.1% between now and 2022 as affordability narrows relative to local incomes.
In Darwin, an undersupply of new homes and a more affordable housing market is likely to support a slow but steady return to rising values. Price rises of 6.4% are forecast by 2022, though 2020 may be the year that values stabilise before starting to climb.
Canberra didn’t really experience cooler market conditions in the way Sydney and Melbourne did, and according to QBE, 2020 will bring more of the same, with total gains of 6.7% by 2022.
How your capital city is expected to perform
House value growth to 2022
Source: QBE Australian Housing Outlook 2019-2022