- Experts expect Sydney and Perth to record the biggest gains nationally
- Comes as the five largest cities have seen a 7% increase this year
- According to Finder, the increase in Sydney is equivalent to double the average salary
Experts predict both Sydney and Perth to record the biggest gains in house prices across the country, according to Finder’s latest RBA Cash Rate Survey.
The predictions come as the property market continues to record strong growth over the past few months with the five largest capital cities average values increasing by 7% between January and May.
The economists expect a further 8% increase in property values over the remainder of the year; applying this forecast would suggest a 21% increase in Sydney house prices this year.
This totals a $216,300 increase – meaning, based on the average Sydney salary of $92,034, the average Sydney homeowner will earn more than double the annual wage this year.
“To put that into perspective, prices rose by just 4% in 2020 and 2019, and dropped by 8% in 2018,” said Graham Cooke, Finder’s Head of Research.
“A 21% increase would be the highest annual increase for the Sydney property market in recent history, beating the previous record of a 15% rise in 2013.”
Graham Cooke, Finder
More specifically, experts predict increases between 13% to 21% for the five major capital cities:
- Sydney’s average house price to increase from $1,030,000 to $1,246,300
- Melbourne from $806,000 to $926,900 – a $120,900 increase
- Brisbane from $581,000 to $679,770 – a $98,770 increase
- Perth from $530,000 to $609,500 – $79,500 increase
- Adelaide from $511,500 to $577,995 – $66,495 increase
Additionally, experts expect a June-to-December increase of 7% in Canberra and Hobart, and 6% in Darwin.
With the Reserve Bank of Australia deciding to keep interest rates on hold and stating they are satisfied with current lending standards, it is unlikely anything will stop the increase in house prices anytime soon.
However, Peter Boehm of CLSA Premium believes interest rates will ultimately be forced up.
“Whilst the RBA has indicated rates will likely be held at their current levels for the next few years, it seems more likely its hand will be forced as inflation in Australia and other economies in the Western world heads up,” said Mr Boehm.
“And if rates are increased earlier than predicted, this will reflect a positive sign for employment and the economy.
“However, it won’t be such good news for borrowers (government, corporate and homeowners) who could see substantial increases in their mortgage payments and debt burden.”
Peter Boehm, CLSA Premium