house cash
All 40 economists agree house prices will rise considerably over the next two years. Source – Canva
  • 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.

You May Also Like

Australian building costs have continued to soar, but has your insurance cover kept pace?

MCG Quantity Surveyors analysis found underinsurance could cost homeowners over $100K to replace a property, with the issue even more profound in the commercial property sector.

When will Australian property prices fall? One major challenge continues to prop prices up

Property prices are up by over 35% across the country since Covid, and while not the same story in each city, that’s little solace to prospective buyers pulling their hair out.

A window of opportunity could be open for savvy Australian property investors, but time is ticking

One expert has noticed investors are on the move while there’s less competition and fewer buyers in the marketplace.

Why Aussie property buyers aren’t waiting for rate cuts anymore

A surge in home loans shows buyers aren’t waiting for interest rates to drop before taking the plunge.

Top Articles

PropertyGuru Asia Property Awards (Australia) returns for its 7th edition, including several brand new award ...

This year's awards include several brand new categories, with entries closing 2 August 2024.

Thinking of borrowing for a new home? We decode the home loan lingo and explore ...

We take a look at everything from principal and interest to rates and more.

A window of opportunity could be open for savvy Australian property investors, but time is ...

One expert has noticed investors are on the move while there's less competition and fewer buyers in the marketplace.