Australia is on the “cusp of a housing boom”, according to the Commonwealth Bank, which has forecast house prices will skyrocket by a massive 16 per cent over the next two years.
An economics issues paper by the bank’s head of Australian economics, Gareth Aird, predicted national house prices would rise 9 per cent rise in 2021 and a further 7 per cent in 2022.
While Sydney and Melbourne are tipped to rise by 7.5 per cent and 7 per cent, respectively, it’s price growth outside of the country’s two largest capitals that is expected to really soar.
Darwin is predicted to rise by 12 per cent by the end of this year, Perth by 10 per cent, Brisbane by 9.5 per cent and Hobart, Adelaide and Canberra all by 9 per cent.
It’s a stunning turnaround from the dire predictions made during the pandemic’s early days last year, which Mr Aird admitted had taken many in the industry by surprise.
“The negative impact that COVID-19 had on Australian property prices turned out to be much more muted than almost any forecaster expected, us included,” he wrote.
“We were earlier than most, however, to recognise this and revised our call in September 2020 to look for a smaller peak-to-trough fall and a decent lift in prices over 2021.