Buyer's agent platform BuyersBuyers.com.au forecasts the two capitals will see house prices rise 8-12%, while Brisbane and South East Queensland will also see solid growth of 6-10%.
Perth, Adelaide, and Canberra will also see growth of around 4-8%.
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| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Additional Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
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Chief operating officer of BuyersBuyers.com.au Pete Wargent said the housing market landscape had shifted quickly over the past three months.
"We expect to see a strong 2021 for housing, with more and more investors coming back into the market’ Mr Wargent said.
"With investment loans now available in the 2% to 3% range, comparatively speaking yields are now looking more attractive in many areas, and the investors are returning.
"Some markets, such as houses in Brisbane, are noticeably picking up."
BuyersBuyers.com.au said relaxed responsible lending laws, coupled with interest rates that were making it cheaper to rent than buy in some cases, would result in increased demand for detached houses.
Sydney and Melbourne's house price spike is set to be driven by a low availability of stock of quality assets and increased demand, already being evidenced by increasingly robust auction clearance rates.
Doron Peleg, chief executive of RiskWise Property Research, said the forecasts reflected the improved market conditions, stimulatory settings, and the successful containment of COVID-19 in Australia.
"While some risk areas of the market remain, especially in some of the oversupplied unit segments of the market, overall, 2021 is set to be a strong year of capital growth in Australian property," Mr Peleg said.
Areas in New South Wales attracting lifestyle buyers include Byron Bay, the Central Coast (North Avoca, Terrigal, and Wamberal), the Hunter Valley, Wollongong, and the NSW South Coast.
Victoria's elimination of COVD has meant the housing market has shifted from a buyer's market to a seller's one.
Three months ago, home buyers in Melbourne were in a solid position to leverage market conditions, with very low volumes and low auction clearance rates.
This is no longer the case though, with a sharp increase in buyer sentiment and auction clearance rates.
In both capitals, unit markets remain a much higher risk than their housing counterparts, with a number of oversupplied suburbs.
Meanwhile, the Queensland housing market, particularly houses in Brisbane, the Sunshine Coast, and the Gold Coast, are set for strong growth, after prices held up well through COVID.
Sentiment improving sharply
According to the Westpac-Melbourne Institute, housing market sentiment surged in September and October, along with a sharp increase in Westpac's House Price Expectations index, which lifted in September and October by 21.7% and 31.5%, respectively.
BuyersBuyers.com.au said although this index was still 6.5% below the average level in the six months prior to the pandemic, it was highly likely the index will rise materially in the next six months.
"Clearance rates across the country are likely to remain high and similar to pre-pandemic levels," it said.
"With improved consumer confidence and auction clearance rates it is likely that while volumes will materially increase in 2021, auction clearance rates will remain high, above the 70% mark."
ANZ forecasted earlier in November national house prices were set to rise by 9% in 2021, but tipped Perth as the top performer, with a 12% spike, while Melbourne would lag behind the other capitals, with growth of 7.8%.
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