With green shoots starting to appear in some markets, investors and analysts are starting to forecast what is in store for the Australian property market in 2020.
Before we do that let's recap where we are and how the market has performed to date. Overall the trend in 2019 has been a continued slide, albeit at a slower rate than last year. CoreLogic data from July identified five of the eight state capitals recording a slight rise in values. This has given some cause for optimism, especially in light of the easing of lending restrictions and drop in interest rates.
Our Consumer Sentiment Report for Q2 2019 mirrors this and records rising national consumer sentiment after a year long decline.
But what do the experts and analysts predict for 2020 and where are Australian house prices headed in the new year? Here is a summary of views from economists at leading financial institutions, including HSBC, Domain, ANZ, Moody's and Citi Research.
- 2020: 0-4% growth in house prices
"HSBC Chief Economist Paul Bloxham predicts house prices to stabilise by the end of 2019 and believes they will return to growth in 2020"
- 2019: 1% growth in dwelling values
- 2020: 2-4% growth in house values and 1-3% growth in unit values
- 2019: -5% fall in dwelling values
- 2020: -1% fall in dwelling values
"ANZ economists point to the tightening of lending criteria as the major driver of weakness in the recent market downturn."
- 2020: 3% growth in house prices by December 2020
- 2019: -7.8% drop in dwelling values
- 2020: 2.2% growth in dwelling values
- 2021: 4.7% growth in dwelling values
Looking into a crystal ball: 2020 house price predictions
Just remember that these are only predictions, though they are being made by analysts who use a range of economic data, property market metrics and macroeconomic indicators to make their forecasts.
"Analysts are unanimous in that there is cause for optimism and that markets will begin to recover in 2020"
As you can see, they are unanimous in that there is cause for optimism and that markets will begin to recover in 2020. However, only time will tell what the new year holds, and if the market is capable of reversing the current trend and return to a positive state in the immediate future. This will depend on a range of factors including how the local economy performs, wage growth and other global economic variables.