Home price growth to take a breather in 2017, says survey of economists

Home price growth to take a breather in 2017, says survey of economists
Home price growth to take a breather in 2017, says survey of economists

The rise in home prices is expected to moderate in 2017, especially Sydney and Melbourne, where prices will take a breather from their double-digit growth, according to a forecast by leading economists in the 2017 BusinessDay Scope survey. 

The CoreLogic measure for home price increase will grow by just 4.9 per cent in Sydney, while for Melbourne it will be 4.3 per cent, a far cry from the 15.5 per cent growth for Sydney and 13.7 per cent for Melbourne in 2016. 

The BusinessDay survey carried by The Sydney Morning Herald is made up of forecasts from 27 leading economists. Over time its average predictions have proved to be more accurate than those of any of its individual members.

Some forecasters expect home prices to fall — Nicki Hutley (Urbis Consulting), Stephen Koukoulas (Market Economics) and author, Professor Steve Keen -- while two expect no growth (Jakob Madsen of Monash University and Richard Robinson from the property specialist BIS Shrapnel), the report said.

The highest forecasts are for further growth of 12 percent -- Julie Toth of Australian Industry Group and Renee Fry-McKibbin of Australian National University -- for Sydney and Mardi Dungey (University of Tasmania) for Melbourne.

The range of housing investment forecasts is also wide, with the highest being a growth of 11 per cent (Neville Norman of the University of Melbourne) while the lowest is a slide of 5.5 pe cent (from the Housing Industry Association).  The average forecast is a low 1.9 percent growth. 

The general consensus also says the Reserve Bank won’t adjust interest rates at its first meeting for the year on Tuesday and has very little pressure to adjust them at any time during the year. 

Below is the results of the survey given to the economists.

Name

Company

Sydney home prices year to Dec (%)

Melbourne home prices year to Dec (%)

Stephen Anthony

Industry Super

5.4

7.1

Sally Auld

JP Morgan

-

-

David Bassanese

BetaShares

5

5

Paul Bloxham

HSBC

5

3

Michale Blythe

Commonwealth Bank

7

5

Paul Dales

Capital Economics

8

10

Besa Deda

Bank of Melbourne

6

4

Bill Evans

Westpac

-

-

Shane Oliver

AMP Capital

4

3

Sun-Lin Ong

RBC Capital Markets

-

-

Riki Polygenis

National Australia Bank

3.9

4.8

Richard Yetsenga

ANZ Bank

-

-

Janine Dixon

Victoria University

-

-

Mardi Dungey

University of Tasmania

10

12

Saul Eslake

University of Tasmania

 

-

Renee Fry-McKibbin

Australian National University

12

10

Steve Keen

Kingston University, London

0

-4

Guay Lim

Melbourne Institute

6

4.5

Jakob Madsen

Monash University

0

0

Bill Mitchell

University of Newcastle

8

8

Neville Norman

University of Melbourne

9

11

Nicki Hutley

Urbis Consulting

-3

-5

Stephen Koukoulas

Market Economics

-5

-6

Richard Robinson

BIS Shrapnel

0

0

Shane Garrett

Housing Industry Association

5

4.5

Margaret McKenzie

ACTU

-

-

Julie Toth

Australian Industry Group

12

10

Low

-5

-6

High

12

12

AVERAGE

4.9

4.3

Tags: 
Dwelling Values Home Prices

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