Australian house prices to bounce back in 2019 and 2020: Domain

House prices will keep falling in the first half of 2019 before turning around and growing modestly, resulting in annual growth of about 1% over the year to December 2019, according to the latest Domain forecasts.

Domain predict house price growth will increase to 4% over the year to December 2020.

Overall this is a predicted fall of 7% from the 2017 price peak of $820,000 to a low of about $760,000 in mid-2019. At this low point, Australian house prices will be back at their 2016 levels.

Domain Economist, Trent Wiltshire said: "leading indicators of prices, such as low clearance rates, falling home loan approvals and a rising stock of listings suggest prices will continue to fall in the months ahead, with Australian house prices expected to fall by about 6% over the year to December 2018."

Source: Domain 

Australian unit prices are anticipated to grow by 2% in 2019 and 3% in 2020.

Unit prices are expected to bottom out in early 2019 after falling by 3% over the year to December 2018.

They are predicted to fall by approximately 5% from their peak of $568,000 in June 2017.

At this low point of about $540,000, unit prices will be back at their late 2016 level.

Source: Domain 

"We expect unit prices to be more resilient than house prices for two main reasons," Wiltshire said.

"First, there was a smaller run-up in unit prices in the boom period, so there is less market ‘froth’ to dissipate over the 2017-2019 period.

"Second, state government stamp duty concessions will hold up unit prices, particularly in Sydney and Melbourne."

Solid population growth, low unemployment and low interest rates will underpin Australian property price growth in the medium term.

More restrictive lending conditions will continue to weigh on prices in the immediate future.

"Eventually, borrowers will begin to adjust to this new normal (including having a better understanding of how much they can borrow and how long it takes to secure a loan) and lending will begin to grow again, although at a modest pace," Wiltshire said. 

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