House prices continued rising across Australia’s five largest State capitals through the month of February.
Already, in the first half of February, property prices have risen as much as they did in the whole month of January.
This week Australia’s biggest bank – the CBA – upgraded its housing market forecast, joining the long line of economists that have done an 180° about face.
The bank said surging momentum in the property market and leading indicators pointed to strong price rises, forecasting dwelling prices will rise 8% in 2021 and 6% in 2022.
They believe house prices will rise 16% in that time and unit prices by 9%, continuing the disparity in these two segments of our property markets.
To get a better understanding of what’s really happening in our housing markets watch my chat with Dr. Andrew Wilson, chief economist of My Housing Market in our weekly Property Insiders Video
Why did economists get their forecasts so wrong last year?
The CBA has recently changed its forecasts and are now suggesting our housing markets are going to boom.
They are forecasting that dwelling prices will rise 8% in 2021 and 6% in 2022, with house prices rising 16% in that time and unit prices by 9%, continuing the disparity in these two segments of our property markets.
The bank’s economists have joined the throng of other “experts” who only 12 months ago told us our property markets were going to crash, when many commentators suggested falls of 20 to 30% falls in property values .
Looking back today they’re saying the reason our property markets didn’t crash was all due to government stimulus packages
Watch this week’s video is Dr Wilson explains why JobKeeper, JobSeeker and other stimulus packages are not the reason our property markets are performing so well.
The Victorian lockdown turns the booming Melbourne housing market on it’s head – for now
The Melbourne housing market start of the year with a full head of steam, with high auction clearance rates and surging buyer and seller activity causing prices to rise strongly.
There was a clear prospect of an overall annual price increase of up to 10%, with the local market in catch up mode from the impediments of recent years.
Watch this week’s video as Dr. Wilson expains that although the newly announced Victorian lockdown rules will clearly impact the Melbourne housing market in the short-term through restrictions of inspections and the inability to transact property, as with last years experience, this will likely prove only a pause in what is clearly a strong underlying market dynamic.
Auction clearance rates
Most capital cities reported boomtime clearance rates, despite a rise in the number of properties put up for auction and the lockdown in Melbourne.
Sydney recorded its highest weekend auction clearance rate since May 2015 and the second highest on record.
Despite the imposition of a statewide lockdown, Melbourne reported another strong result, just below the previous weekends right.
Both Melbourne and Sydney recorded a surge in Auction numbers compared to the previous weekend.
When auction clearance rates remain above 80%, suggesting significantly more buyers in the market then there are good properties, it tends to lead to rising house prices.
Home sellers rush the February property market
Watch this week’s video as Dr Wilson explains how robust housing market conditions have motivated a rush of sellers keen to take advantage of the currently strong buyer appetite for property.
Data from My Housing Market reveals that the number of national capital city established homes newly advertised for sale over the week ending February 7 surged by 11.5% compared to the previous weeks total.
National total new listings over 2021 so far have are now 7.2% higher than recorded over the same period in 2020.
Home Sales Surging – And there’s more to come
Home buying activity has also surged over the past week with the clear prospect of strong market conditions continuing into the autumn selling season – and beyond.
Data from My Housing Market reveals that the number of national newly reported homes sales over the week ending February 7 surged by 17.2% compared to the previous weeks total.
National newly reported sales over 2021 so far are now 33.6% higher than recorded over the same period in 2020.
Watch this week’s video as Dr Wilson explains that property turnover- the number of new properties listed for sale and sold - is a more in time indicator what’s really happening in the property market then the number of properties currently on the market for sale.
Michael Yardney is CEO of Metropole Property Strategists, which creates wealth for its clients through independent, unbiased property advice and advocacy. He is a best-selling author, one of Australia’s leading experts in wealth creation through property and writes the Property Update blog.
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