ANZ says house prices will rise 2 percent in 2018, higher than recent 1.4 percent forecast
The ANZ has raised their 2018 house price forecasts.
It expected prices to rise 2 per cent nationally this year, higher than the 1.4 per cent increase it predicted two weeks ago.
It comes just two weeks after their most recent update.
It suggests the likelihood the next Reserve Bank of Australia rate rise won't come until next year would push up dwelling prices faster this year than previously expected.
The lender expects the central bank to raise rates twice next year.
"We've changed our view on the RBA – our expectation now is for no hikes in 2018 and two in 2019 – which is a positive for the model's forecasts in 2018," the bank said.
"This is offset to an extent by the slightly lower than forecasted price growth in Q1, which means that momentum will be less of a positive for the forecast than previously though."
Under the new forecasting model ANZ said on Wednesday it had introduced, it predicted dwelling price growth next year of 4 per cent.
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This was also higher than the 3.6 per cent gain that ANZ predicted two weeks ago.
It noted actual house price growth for Q1 2018 underperformed relative to the model's expectations.
The bank had previously gone out on a limb suggesting there would be two rate rises during 2018.
Meanwhile the latest ANZ-Property Council Survey shows that optimism in the property sector has remained elevated as 2018 progresses.
Nationwide confidence rose to the highest level on record, with improvement across all states and territories.
"The convergence across the country continues," the report noted.
"We have previously highlighted the trend improvements in Western Australia and Queensland, but South Australia has been a quiet achiever, and is now the most optimistic region in Australia."
It also noted the outlook for the housing sector is improving as expected construction activity has slowly picked up, and a large backlog of work will underpin activity this year.
"Price expectations are also stabilising in positive territory, with the exception of New South Wales," it noted.
Most survey respondents still expect residential property values to increase over the next year, with the notable exception of New South Wales.
Western Australia is the most optimistic region, with a net 53% of respondents expecting to see prices rise from here.
In New South Wales, a net 11% of respondents expect prices to decline in the next 12 months.
"We believe that the worst of the price falls are now behind us, Sydney included," the survey suggested.
But it’s not all smooth sailing for the economy as the retail sector has been under pressure for some time, and respondents are increasingly pessimistic about the outlook for the next 12 months.
"Expectations of price growth and construction activity in the retail sector are falling, and any improvement feels some time away," the report authors, Daniel Gradwell and David Plank noted.