19/11/2019 - 12:07

Perth house prices to trough in 2020

19/11/2019 - 12:07

Bookmark

Save articles for future reference.

House values are predicted to rise next year in every Australian city except for Perth, which could experience a further 5 per cent decrease, according to an economics report from HSBC.

Perth house prices to trough in 2020
Perth house prices fell by 22 per cent in the last five years and could fall a further 5 per cent next year.

House values are predicted to rise next year in every Australian city except for Perth, which could experience a further 5 per cent decrease, according to an economics report from HSBC.

Perth house prices fell by 22 per cent in the last five years – including by 2 per cent in 2017 and by a further 8 per cent in 2018.

"Housing prices in Perth look likely to maintain a flat-to-downwards trend, given the large boost to supply relative to population growth in recent years," the report said.

“The Western Australian economy is improving, though, and mining investment is set to rise modestly over the next few years, so we expect housing prices to trough sometime in 2020."

HSBC has forecasted a rise in national housing values of 5-9 per cent in 2020 (replacing its previously predicted gain of 0-4 per cent), with the rise driven by falling interest rates, looser prudential settings and limited established market supply.

The gains will be led by Sydney and Melbourne, where house prices are predicted to rise by 8-12 per cent and 10-14 per cent respectively.

HSBC said it expects other Australian cities to have modest housing price gains next year.

“We expect housing prices to continue to rise in 2020, underpinned by mortgage rates, which are likely to stay low for a considerable period of time,” the report said.

“However, while we expect to see housing demand remain strong, we also expect the recent strong housing price gains in major cities to entice more sellers, increasing available supply and housing turnover.

“This should temper the recent pace of housing gains in Sydney and Melbourne from their current very rapid monthly rates.”

HSBC said household debt is likely to continue to rise at a modest pace.

“High household debt is unlikely to, in-of-itself, be a trigger of a sharp downturn but it does make the economy more vulnerable if there was a negative economic shock.”

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options