ANZ economists raise home price growth for 'resilient' Melbourne
ANZ economists have raised their expectations for dwelling price growth in 2017 to 5.8 percent from their previous forecast of 4.4 percent.
The housing market update, authored by authored by ANZ senior economists Daniel Gradwell and Joanne Masters, say Melbourne and Sydney will continue to be the main drivers of this growth in line with their expanding populations.
They point to Melbourne’s recent resilience as a reason they “have nudged our 2017 price forecasts higher, and now expect nationwide prices will finish the year 5.8 percent higher, followed by growth of 2.2 percent in 2018”.
They economists wrote that the “Melbourne market has recently been more resilient than the Sydney market, perhaps reflecting an element of ‘catch-up’ after Sydney outperformed in previous years”.
"Note that while we expect price growth will slow, there is no suggestion that prices will fall outright,” adds the report.
The report suggests that weaker auction results point toward a slower price growth through the remainder of 2017, while tighter borrowing conditions, and higher interest rates for investors are likely to weigh on growth through 2018.
However, the revised forecast for Melbourne of 5.8 percent, up from the 4.4 percent ANZ predicted, reflects the continued population growth in the Victorian capital, the latest Australian Housing Update says.
On a national level, price growth has slowed across most capital cities and regional areas and across detached houses and the unit/apartment market over the three months, it said. Prices are now 9.7 percent higher than a year ago, down from the peak of 11.4 percent y/y growth recorded in May this year.
