UBS economists have raised their price expectations for the Australian housing market. After a moderate recovery of between 3% and 5%, their new forecasts forecast an increase of 10% as much as next year.
The revision is due to the strong loan growth observed in July. Figures from the Australian Bureau of Statistics show that loans to investors rose 4.7% to $ 4.6 billion, the fastest pace since September 2016. Homeowner loans have also recorded a substantial increase of 5.3% to $ 13.25 billion.
The overall value of financing commitments jumped 5.1% in July, under the effect of substantial growth in new lending.
"We expect that home loans will increase by 15% to 20% over next year, thus boosting real estate price growth by 5% to 10%," he said. UBS economist George Tharenou.
Read also: Where do real estate prices go up in Australia?
However, Tharenou said that price growth could change the outlook for the official cash rate, which is expected to fall again next month.
"For the time being, the burden is on unemployment and the global central banks are loosening their efforts to reduce the RBA." That being said, regulators should be prepared to resort to macroprudential tightening and to consider new measures. the future if circumstances changed, "he said.
Tharenou said that it was very likely that the central bank would reduce rates and tighten credit rules at the same time to prevent a further surge in real estate prices and mitigate the impact record household income.
The market reaches its bottom
According to data from the Real Estate Institute of Australia, the decline in real estate prices continued during the June quarter.
The median average price of homes decreased by 1%, while the average median value of units decreased by 0.6%.
Despite the continued decline in prices, REIA President Adrian Kelly said the rate of decline seemed to be slowing down.
"With the post-election confidence boost in the real estate market, as evidenced by higher survey levels, two declines in interest rates and changes in the APRA requirements , the June quarter will probably mark the bottom of the cycle, "he says.
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