An eight percent rise in prices would see costs increase another AUD102,306 by the end of 2022
With Sydney’s real estate market already steaming, house prices are expected to surge by another AUD102,000 (USD76,704) in 2022 due to low-interest rates and the return of international travel, reported 9News.
Finder unveils in its new analysis that an eight percent increase in prices in Sydney would lead to a cost increase of AUD102,306 on average by the end of 2022.
This means that the harbour city’s median house price would rise to a shocking AUD1.37 million (USD1.03 million) from its current listing of AUD.127 million.
Graham Cooke, head of consumer research at Finder, said the current rise in house prices can be attributed to 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,” Cooke said.
“Sydney homeowners stand to make an eye-watering 3.5 times the average household salary of AUD97,211 just on their property.
“Melburnians are a distant second, with the average homeowner merely making 1.6 times the average salary,” he added.
Moreover, economists forecast that interest rates will remain steady until at least late 2022, in response to Finder’s RBA Cash Rate Survey.
Shane Oliver, chief economist at AMP Capital, said, “The conditions for a rate hike – i.e. inflation sustainably in the two to three percent target range which will likely require full employment and wages growth of three percent or more – are still not met.”
“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,” 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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