Record house refinancing to continue as cash rate holds

1 February 2021
| By Chris Dastoor |
image
image
expand image

Record house refinancing is expected to continue and property prices are tipped to bounce back in 2021, as low interest rates and limited housing make a stronger case than weak population growth, according to Finder. 

In the latest Finder Reserve Bank of Australia (RBA) cash rate survey, 41 experts and economists expected house prices across every Australian capital city to increase on average. 

Graham Cooke, Finder head of consumer research, said that this positivity in the housing market forecasts was even higher than it was pre-pandemic.  

“The market is surging on the back of low rates, government stimulus, and Aussies having more in their savings accounts on average,” Cooke said. 

“We expect this to continue through 2021, but Perth’s snap lockdown is a reminder that things can change quickly.” 
 
Expected median house price changes in 2021 across capital cities  

 

City 

Current Median 

Price 

Predicted Price 

Change* 

Predicted Price  

Increase 

Predicted price 

by end of 2021 

Perth 

$510,000 

+7.5% 

$38,250 

$548,250 

Brisbane 

$570,000 

+6.9% 

$39,583 

$609,583 

Sydney 

$977,250 

+5.5% 

$53,305 

$1,030,555 

Adelaide 

$505,000 

+5.3% 

$26,653 

$531,653 

Canberra 

$750,000 

+5.3% 

$39,583 

$789,583 

Melbourne 

$750,000 

+5.0% 

$37,500 

$787,500 

Darwin 

$500,000 

+4.7% 

$23,611 

$523,611 

Hobart 

$545,500 

+4.5% 

$24,404 

$569,904 

 

Source: Finder, CoreLogic. *Average of predictions from 18–22 economists, depending on the city. 

According to Australian Bureau of Statistics (ABS) data, last year the total number of home loan customers who switched providers increased by 27% – from 143,664 in 2019 to 182,016 in 2020.  

Experts were predicting another record year of lender hopping, with the number of externally refinanced loans predicted to grow by 9%. 

Experts and economists were united in their view that the RBA would hold the cash rate this month, with very few predicting any movements at all in 2021.  

Nicholas Frappell, ABC Bullion global general manager, said: "The RBA is likely to play out the yield curve control program until Q3-Q4 2021 before considering a change in the cash rate." 

Shane Oliver, AMP Capital chief economist, said: "The economy has recovered faster than expected and the deployment of vaccines should aid further recovery so I have brought forward the timing of the first-rate hike from 2023 to late 2022... but there will still be lots of spare capacity in the economy for a long time which will keep underlying inflation down so a rate hike is still a long way off." 
 

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

JOHN GILLIES

tHOSE 989 WHO ARE CEASED WILL GO ON TO LIVE A LONG AND HEALTHY LIFE JG...

4 days 2 hours ago
Chris Cornish

What a sticth-up. Looks like Labor Senator Jess Walsh follows Stephen Jones who follows what the industry super funds ...

3 days 23 hours ago
Peter Swan

This report is a blatant display of far-left factional partisanship, treating superannuation funds as state property and...

4 days ago

ASIC has cancelled the AFS licence of a Sydney wealth firm, the fifth Sydney firm to see a cancellation since the start of the year....

2 weeks 5 days ago

More than 20 winners from the funds management industry have been crowned at this year’s awards....

1 week 5 days ago

ASIC has obtained interim orders from the Federal Court to freeze the assets of a registered managed fund and prevent its former director from leaving Australia. ...

5 days 23 hours ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND