Sydney and Melbourne house prices will soon be growing at double-digit rates

Sydney and Melbourne house prices will be growing at more than 12 per cent per annum by the middle of next year, one of the nation’s largest banks has forecast as the Reserve Bank talks up the chances of the economy recovering in 2020.

Economists with the ANZ believe a change in sentiment along with cuts in interest rates and the federal government’s income tax reductions will super-charge Sydney and Melbourne to a point they will effectively wipe out the price falls recorded between 2017 and early this year.

Sydney dwelling prices rose by 75 per cent between 2012 and 2017 while over the same period they increased by 58 per cent in Melbourne. They then fell 15 per cent and 11 per cent respectively until June.

ANZ believes that by the end of this year, Sydney and Melbourne prices will be up by 3 per cent. By the middle of next year, they will be growing at an annual rate of 12 per cent and 13 per cent respectively.

By year’s end, a combination of tighter credit and improved supply will mean price growth will come back a little but will still be 7 per cent in Sydney and 9 per cent in Melbourne.

ANZ senior economist Felicity Emmett said the property markets of the two cities were re-bounding much quicker than expected.

“Auction clearance rates bottomed out in December and have been rising since. But the improvement became much more marked from May onwards,” she said.

“The change in sentiment was driven by the combination of lower rates, easier access to credit, and increased certainty around housing taxation. Together, these factors have helped to shift sentiment from one of pervasive negativity to broad optimism.”

The Reserve Bank restarted interest rate cuts on June 5. Since then, dwelling values as measured by CoreLogic have increased by 7.2 per cent in Sydney and 7 per cent in Melbourne.

The lift in prices, however, will come at a longer term cost with household debt levels likely to increase while affordability will fall.

“As prices recover, we expect affordability, particularly in Sydney and Melbourne, to decline,” Ms Emmett said.

Financial markets have pushed back expectations the Reserve Bank will cut interest rates this year.

RBA Governor Philip Lowe, speaking in the United States on Friday, suggested taking rates any lower would fail to deliver major economic benefits and probably feed into prices for assets like housing.

“In my view we’re now clearly in the world of diminishing returns to monetary easing,” he said.

“If that’s right, then the solution to the problem lies elsewhere. That’s creating an environment that encourages investments.”

“Without progress on this front, the main effect of lower interest rates is to push up the price of existing assets, rather than encouraging investments in new assets, which is what’s needed.”

Dr Lowe downplayed suggestions the bank had a “lot more work” to get the economy growing at trend and inflation back within the RBA’s 2-3 per cent target.

“The economy has been through a very soft patch over the past year but it is actually gradually improving, the lower interest rates are working,” he said.

Ref: Shane Wright (on 18 Oct 2019). Sydney and Melbourne house prices will soon be growing at double-digit rates. Retrieved from https://www.smh.com.au/business/the-economy/sydney-and-melbourne-house-prices-will-soon-be-growing-at-double-digit-rates-20191018-p531z3.html

* Sydney and Melbourne house prices will be growing at double-digit rates by the middle of next year, according to the ANZ.CREDIT:JESSICA SHAPIRO

Images from internet

悉尼和墨尔本的房价将很快以两位数的速度增长

随着澳洲储备银行在谈论2020年经济复苏的可能性之际,澳洲四大银行之一的澳新银行(ANZ)预测悉尼和墨尔本的房价到明年年中将以每年超过12%的速度增长。

澳新银行(ANZ)的经济学家认为,随着降息和利率变化以及联邦政府降低所得税,从而使得悉尼和墨尔本更快的、有效的抑制了2017年至今年年初的房价下跌。

2012年至2017年间,悉尼住宅价格上涨了75%,而同期墨尔本的房价上涨了58%。然后,直至今年六月它们分别下跌了15%和11%。

澳新银行认为,到今年年底,悉尼和墨尔本的价格将上涨3%。到明年年中,它们将分别以每年12%和13%的速度增长。

到今年年底,信贷紧缩和供应改善的结合将意味着价格增长将有所回升,但悉尼仍将达到7%,墨尔本仍将达到9%。

澳新银行高级经济学家Felicity Emmett表示,两个城市的房地产市场重新上涨的速度比预期的要快得多。

她说:“拍卖清盘率在12月触底,此后一直在上升。但是从5月开始,这种情况变得更加明显。”

 “购房欲望的变化是由较低的利率,更容易获得的信贷和住房税共同驱动的。这些因素共同帮助置业者从普遍的消极状态转变为广泛的乐观状态。”

澳洲储备银行于6月5日重新开始降息。此后,根据CoreLogic测算的住房价值在悉尼和墨尔本分别增长了7.2%和7%。

然而,房屋价格的上涨将使得家庭债务水平的上升,同时家庭支付能力将下降。

埃米特女士(Ms Emmett)说:“随着房屋价格的回升,我们预计,尤其是在悉尼和墨尔本,家庭支付能力将下降。”

金融市场推迟了对储备银行今年将降息的预期。

澳洲联储行长菲利普·洛(Philip Lowe)周五在美国讲话时表示,将利率降低至任何水平都将无法带来主要的经济利益,并有可能影响住房等资产的价格。

他说:“在我看来,我们现在明显处于货币宽松收益递减的世界。”

 “如果是正确的话,那么问题的解决方案就在其他地方。这正在创造一个鼓励投资的环境。”

 “如果降低利率仅仅是推高现有资产的价格,而不是鼓励对新资产的投资的话,那么我们现在的措施也是必需的。”

Lowe博士表示银行还有很多工作要做,以使经济保持趋势增长,并使通货膨胀率回到澳洲联储2-3%的目标之内。

他说:“过去一年经济一直处于非常疲软的状态,但实际上正在逐步改善,因为较低的利率正在发挥作用。”

Ref: Shane Wright (on 18 Oct 2019). Sydney and Melbourne house prices will soon be growing at double-digit rates. Retrieved from https://www.smh.com.au/business/the-economy/sydney-and-melbourne-house-prices-will-soon-be-growing-at-double-digit-rates-20191018-p531z3.html

* Sydney and Melbourne house prices will be growing at double-digit rates by the middle of next year, according to the ANZ.CREDIT:JESSICA SHAPIRO

Images from internet