ANZ tips capital city price spike

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    Buyers who fear missing out on record-low interest rates are driving a property market frenzy, with ANZ predicting a 17% spike in prices in capital city markets this year.

    The ultra-low lending rates and resulted heated competition has more than offset the effects of elevated unemployment and low population growth on the housing market, according to a report by The Australian. However, these conditions are expected to soften throughout the second half of the year, slowing price increases to 6% in 2022.

    “By June, we expect prices to be rising at a more moderate pace given the end of government programs like JobKeeper and HomeBuilder, and a lift in fixed mortgage rates,” ANZ analysts said. “By year end though, we expect the regulators will step in with macroprudential controls to address the overheating market, with the exact measures likely to be dependent on how the market develops over the next six months or so.”

    Read more: Pressure mounts on CBA, ANZ to slash fixed rates

    ANZ had previously predicted a rise of 9% over 2021, but the strong post-COVID-19 recovery has already seen prices surpass the falls recorded last year, The Australian reported. Housing finance has spiked 76% since the May low, driven by a raft of first-home buyers rushing to the market. More than 30% of new loans have been fixed in the last six months, and while new listings have increased, they haven’t kept pace with sales – leaving inventory low as investors start to dip their toes back into the market.

    Auction clearance rates are running near 80% in most capital cities, with households expecting strong price rises, The Australian reported.

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    Original Article