Market Sentiment Soars
Despite ongoing economic challenges, housing market sentiment ended last year on a high note, according to a new report from NAB Economics. NAB’s Quarterly Australian Residential Property Survey Q4 2020 shows that the group’s Residential Property Index ended 2020 at a survey high of +45 points. For comparison, this comes just six months after the index fell to a survey low -33 points in Q2, 2020.
Confidence lifted across the country amid sharp upward revisions to expectations for house price growth and rents. NAB sees house prices rising at a solid clip, with capital city house prices to rise around 8 per cent in 2021 and 6 per cent in 2022.
NAB Chief Economist, Alan Oster, says that lower rates will be a key driver of prices, although some risk remains of a weaker labour market and population growth.
First Home Buyer demand remains very strong in new and established housing markets and is likely being supported by historically low interest rates and government support such as the First Home Loan Deposit Scheme and HomeBuilder. The brief pullback in house prices earlier in the year may have also helped sentiment among these buyers, Oster suggests.
“The housing market has fared significantly better than expected over the past year, despite significant headwinds from slower population growth and a weaker labour market. Lower interest rates and household income support from the Federal Government have been a key support amidst the challenges of the pandemic.”
Source: EPS Property Search