A bunch of forecasts have been released predicting strong house price growth, driven by Sydney and Melbourne.
First, global realtor Savills expects Sydney’s high-end market to lead the world in house price growth in 2020:
Savills predicted Sydney’s prime market will grow between 6 and 7.9 per cent, putting it in the top band of global performers…
“Luxury property in Sydney’s key markets have [sic] definitely bounced back,” Savills Australia residential director Chris Orr said. Savills defines prime property as the top 5 per cent of housing stock…
Second, both CoreLogic and HSBC are tipping double-digit price growth for Sydney and Melbourne this year:
CoreLogic and HSBC expect price gains this year to be less than those seen in the second half of last year. HSBC forecasts a national dwelling price rise of between 5 per cent and 9 per cent this calendar year, with Sydney values gaining between 8 per cent and 12 per cent and Melbourne values rising between 10 per cent and 14 per cent.
These price expectations are fair enough given the current momentum across both markets amid low supply:
However, rising unemployment and falling sentiment are going to be mounting headwinds for the housing market as the year progresses.
We discussed these issues in detail in our Christmas Special Report.