Housing markets are forecast to take off in 2021 after a year plagued by the pandemic recession that saw Australians squirrel away $110 billion in savings.
With the economy now out of a recession and auction clearance rates steadily rising, Australians’ strong appetite for bricks and mortar is strong – and some of the money households saved during the lockdown phases is likely to go into the housing market.
CBA head of economics Gareth Aird says improving consumer sentiment and cashed-up households are fuelling price growth. “A few forces are all pointing to higher house prices,” he says. “Some of the forward-looking indicators like lending have increased quite quickly in the past four months.”
New home loan commitments reached record highs in October, according to ABS data. Mortgage Choice Dee Why principal James Algar says consumer sentiment has picked up with more and more people preparing to enter the market next year.