On Thursday Westpac broke ranks with the other big four banks to lay down its latest thinking, expecting the property market to get through the pandemic relatively unscathed before booming.
Months ago Westpac predicted national prices to fall by 10% and to recover a little more than 8% by 2022. However this week, chief economist Bill Evans and senior economist Matthew Hassan noted their expectations had improved as the market showed resilience.
Instead, national prices will eventually decline 5%, or 2.3% more, to June, according to the pair. A locked-down Melbourne will lead the pack lower, shedding 12%, followed by 5% in Sydney, and 2% in Brisbane, while Perth won’t budge and Adelaide will actually lift 2%.
Some distressed selling will occur in June and September, the economists expect, as mortgage deferrals expire in March. But once overstretched borrowers have left the market and prices decline, especially in inner-city areas, the market is forecast to boom.
“We expect price increases over that 2021–23 period of 15% [or] around 7.5% per year,” Evans and Hassan wrote.