Last week I posted about the short-term direction of house prices.
To recap there appears to be a clear relationship – causation not correlation – between the annual change in housing finance (when brought forward by six months) and the annual movement in house prices.
Two tables help outline the short-term future direction of Australia detached house prices, by capital city.
Table 1 shows – and assuming the historical relationship between housing finance and detached house prices hold – that the median detached house price across Australia could be in excess of $1million by the end of 2021.
Table 2 outlines that over the past six months, detached house prices rose by 12% across Australia – and again if the past link between the growth in housing finance and house prices continues – then Australian detached house could rise by $210,000 or as much as 23% between the 30th June and 31st December this year.
House sales are rising whilst stock listed for sale is declining, adding another string to the housing market’s bow. Lockdowns are giving people time to investigate buying, whilst keeping supply tight. Loose credit and record low interest rates are adding fuel to the fire.