Property prices are going to fall. Home values are going to rise. Apartments will be sold on the cheap but houses will be in high demand. Regional areas will outpace capital cities.
All of the above predictions has been made by reputable forecasters at some point during the last 12 months as housing market researchers frantically grabbed at disparate data-points in an attempt to make sense of the pandemic’s effects on the economy and, ultimately, the psyche of home buyers and sellers.
The consensus at the height of the coronavirus outbreaks was that there would be a deep and painful fall in home values in the most prized Sydney and Melbourne real estate markets, which would’ve shaved hundreds of thousands of dollars off the value of a median house. This type of fall could force some home owners into negative equity, where their debt is larger than the value of their asset, and weigh heavily on household spending with a worrying knock-on effect to other parts of the economy.
As it turns out, this expectation could not have been more wrong.
Prices reached record highs in most capital cities at the beginning of this year, data from housing research company CoreLogic shows. The possibilities facing the country during the early days of the pandemic where endless, so it is not shocking that predictions made at the height of the pandemic wound up being totally off the mark.
Now, ANZ (which also forecast major price falls last year) predicts home prices in Sydney and Melbourne will experience their strongest year since the 1980s and rise 19 per cent and 16 per cent respectively.
By comparison The Sydney Morning Herald/The Age Scope Survey on average predicts Sydney property prices to grow 5.9 per cent in 2021 and 4.5 per cent in 2022, with Melbourne prices to rise 4.5 per cent in 2021 and 5 per cent in 2022.
While asking the public to spare a thought for property price forecasters might be a stretch after a year of life-threatening global crises, it’s hard not to feel sympathy during such a tumultuous period for anyone trying to point accurately in the right direction.
So, given the track record of property price forecasts over the past year and the difficulties in determining the future during an uncertain time – how cautious should we be when believing these various claims? The answer: very cautious.
Article Source: www.brisbanetimes.com.au
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