Australian property values are climbing fast in 2021.
ANZ has revised its forecast for Australian property prices in 2021, now predicting a 17% increase across the year. This is a significant upward revision from its earlier forecast of 9% growth. A strong November performance in property values prompted the bank to update its outlook. For buyers, sellers, and investors, this forecast has real implications for decisions being made right now.
City by city
The forecast growth is not spread evenly across the country. Sydney and Perth are tipped to lead with predicted price increases of around 19%. Melbourne and Brisbane are close behind, with forecasts of 16% and 13% growth respectively.
These figures represent the fastest pace of price appreciation seen in Australia for some years. For buyers already stretching to enter the market, this pace underlines the importance of understanding how much you can realistically borrow. Our borrowing power calculator can help you work out your position before you start making offers.
Sellers are winning
The data supporting the ANZ forecast is compelling. In December, 89.9% of property resales were profitable, up from 87.9% in June. Total resale value rose to $31.9 billion from $24.8 billion in the prior quarter. The market has decisively tilted toward sellers.
Despite this, demand from buyers remains strong. Around 22% of Australians said they plan to purchase a property within the next five years. That sustained demand, combined with limited housing supply, is one of the key drivers keeping upward pressure on prices. The property auction market activity in early 2021 also reflected this competitive environment.
Selling in 2021
If you’re planning to sell, the current environment is working in your favour. To make the most of it, there are a few things worth doing before listing.
If you’re selling to buy elsewhere, remember that stamp duty will apply to your next purchase. Use our stamp duty calculator to factor this into your budget before exchanging contracts.
What buyers should do
In a market rising at this pace, sitting on the sidelines has a real cost. Every month of delay can mean chasing prices that have moved further out of reach.
The most important thing you can do right now is get your finances in order. Know your borrowing limit, have your deposit confirmed, and get pre-approval in place so you can move quickly when the right property comes up. A mortgage broker can help you compare lenders, maximise your borrowing capacity, and get a pre-approval that sellers and agents will take seriously.
Common questions
Q: Are Australian property prices expected to keep rising in 2021?
ANZ revised its 2021 forecast to 17% national growth after a strong performance in late 2020. Sydney and Perth are forecast to lead at around 19%, with Melbourne and Brisbane not far behind. Low interest rates, strong demand, and limited supply all support continued price growth.
Q: Is it still worth buying in a rising market?
For most buyers, yes. Waiting for prices to fall means risking further increases. If you can borrow comfortably and service a loan at current rates, getting into the market sooner rather than later tends to work in your favour over the long term.
Q: Why are property prices rising so fast in 2021?
A combination of factors is driving price growth: historically low interest rates increasing borrowing capacity, strong demand from buyers including first home buyers, limited housing supply, and high confidence in the property market following a strong end to 2020.