Sydney to achieve highest mainland dwelling price growth in 2021: NAB

Hobart dwellings were forecast to record the biggest price growth by the year’s end, with property values to rise 23.5 per cent.

Sydney to achieve highest mainland dwelling price growth in 2021: NAB
Sydney to achieve highest mainland dwelling price growth in 2021: NAB

Sydney dwelling prices will rise 21.6 percent, the highest predicted growth rate on the mainland, according to revised NAB forecasts.

NAB has forecast Sydney in 2021 will then see a 3.1 per cent rise in 2022.

The National Australia Bank’s latest quarterly residential property survey forecast Brisbane will secure the second highest dwelling price growth on the mainland.

It is forecast Brisbane will see a 19.5 per cent rise in 2021 and a 4.4 per cent rise in 2022, the strongest market next year.

Sydney to achieve highest mainland dwelling price growth in 2021: NAB

Melbourne will jump 17.6 per cent by the end of 2021, which was a 1.4 per cent rise on their prediction in April. There will be 3.5 percent Melbourne price growth in 2022.

All three major capital cities have followed the same pattern.

"We have revised up our outlook for dwelling prices in 2021 and slightly lowered our expectations for 2022 to now 18.5% and 3.6%, respectively," NAB's Alan Oster said.

Sydney to achieve highest mainland dwelling price growth in 2021: NAB

"Faster than expected outcomes in recent months see a higher starting base, and while we see a slowing in the monthly pace of growth from here, we still see solid growth over the next 6 months.

"The upgrade to our forecast is relatively uniform across capital cities. 

"The better than expected recovery in the economy and labour market alongside very low interest rates has supported the strong rebound in the property market. 

"Affordability constraints will likely begin to bind over the year and see a slowing in price growth as the impact of lower rates fades," he said.

Hobart was tipped to see the fastest growth at 23.5 per cent in 2021 and a 4.3 per cent rise in 2022.

The report anticipates a 17.4 per cent rise in 2021 and 3.9 per cent rise in 2022 in Adelaide, and an 11.6 per cent rise in 2021 for Perth with a 3.9 per cent rise in 2022.

The NAB chief economist Alan Oster noted the latest survey of experts remained optimistic the property market would continue its strong trajectory.

“Initially we were quite worried about the lockdowns, but what we’ve seen is when you come out of lockdown the market recovers pretty quickly.”

NAB said that it still expects house prices to lift at a faster rate than unit prices, which have been more impacted in major cities by slowing population growth due to international border closures amid the pandemic.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

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