Sydney’s house prices are anticipated to rise by another $102,000 in 2022 as low interest rates coupled with international travel resuming breathe new life into an already hot market.
New analysis by Finder predicts an 8 per cent rise in prices in Sydney would see costs increase another $102,306 on average by the end of 2022.
That would take the harbour city’s median house price to a heart-clutching $1.37 million from its current level of $1.27 million.
Head of consumer research at Finder Graham Cooke said the current house price surge was being driven by both owner-occupiers and local investors.
“The opening of international borders, and the return of potential overseas investors, may well re-fuel the market even further,” Mr Cooke said.
“Sydney homeowners stand to make an eye-watering 3.5 times the average household salary of $97,211 just on their property.
“Melburnians are a distant second, with the average homeowner merely making 1.6 times the average salary.”
Economists responding to Finder’s RBA Cash Rate Survey are forecasting interest rates will remain steady until at least late 2022.
“The conditions for a rate hike – ie inflation sustainably in the 2-3 per cent target range which will likely require full employment and wages growth of 3 per cent or more – are still not met,” Shane Oliver, Chief Economist at AMP Capital, said.
“But with recovery getting back on track they should be by 2023.”
David Robertson, Head of Economic and Market Research at Bendigo Bank, said Australia’s central bank has conservatively positioned itself to wait for inflation to lift the cash rate.
“The recent surge in inflation means central banks around the world are increasing official interest rates more urgently,” Mr Robertson said.
“The RBA has sensibly positioned itself at the back of the central bank queue for rate hikes, but the queue is now moving quickly, bringing a late 2022 or early 2023 rate hike back into focus.”
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