Home values set to grow again

When COVID-19 hit, the forecast was for — at least — a 10 per cent drop in house prices. Now? Experts are predicting substantial gains in 2021.

Home values have been tipped to rise significantly in Hobart next year. Picture: SUPPLIED

HOBART house prices have been tipped to climb substantially next year.

In the ANZ’s latest report Housing: a strong 2021, the bank’s economists forecast a buoyant year ahead for the Hobart housing market.

Alongside Perth and Brisbane, the southernmost capital’s forecast was for more than 9 per cent growth.

ANZ economists Felicity Emmett and Adelaide Timbrell say an early COVID-19 vaccine rollout and the resulting lift in sentiment may drive “larger price gains than we anticipate”.

“That said, we think regulators would be quick to step in with macro prudential measures if the market looked be overheating,” the economists said.

Growth in Hobart home prices is on the horizon - again.

Felicity and Adelaide said Hobart’s property market — alongside Adelaide, Darwin and Canberra — had maintained an upward pricing trend through the pandemic.

They said house prices were turning higher, helped by lower interest rates, substantial government stimulus and a bounce in confidence as the second wave of the pandemic comes under control.

“These factors seem to be offsetting weak fundamentals of high unemployment, very low population growth and a fractured rental market,” the economists said.

In the latest NAB residential property survey, the forecast for Hobart was also strong with a nation-leading 5.1 per cent growth expectation next year, followed by 7.1 per cent and 7.4 per cent in the following years.

Meanwhile, the latest Australian Bureau of Statistics Household Impacts of COVID-19 Survey found almost one in five Australians reported someone in their household had experienced COVID-19 stressors in October.

These include unemployment or stress related to rent, mortgage or finances.

The October figure (19 per cent) was higher than the survey results in June (15 per cent), but lower than April (22 per cent).

The ABS found that for those who live in a home owned with a mortgage there had been a climb from 5 per cent in June up to 11 per cent in October for people reporting someone in their household experiencing problems paying the mortgage for a home or investment property.

Comparing October and June this year, the data revealed one or more family members had experienced:

Problems getting a job (10 per cent in October, up from 6 per cent in June).

Involuntary job loss (3 per cent both months).

Difficulty paying the rent or a fear of eviction (4 per cent both months).

Originally published as Home values set to grow again