10 per cent peak to trough declines “too pessimistic” ANZ Research

ANZ Research have upgraded their dire house price forecast, saying their view that house prices would decline around 10 per cent peak to trough has proved “too pessimistic.” “The housing sector is turning a corner”, ANZ economists Felicity Emmett and Adelaide Timbrell said in their latest report, noting the sharp turnaround looks to be limited to just over two per cent declines. “After falling since April, national house prices were flat in October and look set to rise over coming months. "The strength is largely being driven by owner-occupiers, with low interest rates appealing to buyers in secure employment. This is the case for upgraders as well as first home buyers.” ANZ now believe house prices at the national level will rise modestly over the balance of this year, with gains of around nine per cent across the capital cities in 2021. They expect Perth to be the best performer across the country, with 12 per cent house price gains next year. They predict Brisbane to be the second best capital in the country with 9.5 per cent gains, closely followed by Hobart at 9.4 per cent. Sydney, the nation’s biggest housing market, will see 8.8 per cent gains according to the forecast, with Melbourne to grow 7.8 per cent. ANZ Research noted that the number of deferred mortgages were falling quickly. At the peak, 11 per cent of mortgages (by value) were on deferred payments, ANZ noted. As of September, APRA reported it had fallen to seven per cent. “With the bulk of loan deferrals expiring in October, this number has fallen further.”