- Sydney average house price expected to see an increase of $120,000
- Melbourne and Canberra set to see $90k + increase in median sale prices over the next two year
- Majority believe it will be a few years before the cash rate is increased
Finder has announced the results of their RBA Cash Rate Survey. Amongst other issues surrounding the economy, the panel of economists have predicted the increase in house prices.
On average, the panel expects property prices nationally to increase by 12% over the next two years.
The Head of Consumer Research at Finder, Graham Cooke, believes the market is on the rise and suggests that first-home buyers with a deposit saved should enter the market sooner rather than later.
“With more than $120,000 set to be added to the value of the average Sydney home over the next 2 years, the brief period of ‘affordable’ prices appears to be ending,” said Mr Cooke.
“ABS lists the median Aussie income at $49,805,* so homeowners in the Harbour City will be earning 22% more than the average income, just by living in their homes for 2 years.”
Along with Sydney’s prediction, Melbourne and Canberra are both expected to record price increases of over $90,000 in the next two years pushing the median sales price to $873,600 and $859,040 respectively. The remaining capital cities are predicted to see price increases in the $61,000 to $69,000 range.
Leanne Pilkington of Laing+Simmons added the Reserve Bank of Australia (RBAA)’s commitment to keeping the cash rate low has helped to fuel confidence in prices.
“This stated unwillingness to tinker with rates will provide confidence to home buyers and continue to support rising property prices in the near term,” Ms Pilkington said.
Only one of the survey participants believes any movement at all in the cash rate will occur this year.
RBA Governor, Philip Lowe, has repeatedly said the cash rate won’t increase for several years citing inflation is very low in part due to virtually no increase in wage growth.
“The RBA have been explicit that they don’t expect to raise the cash rate until 2024. Their hand may be forced a little sooner than that, but the first rate hike is still a couple of years away,” says Sean Lamgcake of BIS Oxford Economics.
For a bubble to form, the economists have predicted a 23% average increase in property prices over the next 2 years – only two participants predict that prices will increase by this amount within this timeframe.
