House prices could rise 15% this year as investors push into the booming market, with APRA unlikely to intervene, says investment bank UBS. The forecast is significant because UBS generally takes a highly negative view of real estate prospects.
The forecast comes as the latest CoreLogic housing data suggests national house prices are rising at the fastest pace in three decades.
A shortage of houses, rising sentiment, government stimulus, credit availability and a willingness to borrow have combined to push house prices to fresh record highs, with the market now watching for APRA’s next move.
“The future expectation of low rates has given the market another leg up,” says UBS Australia chief economist George Tharenou. “People are thinking that over the next three to five years they’re going to have continued low interest rates, so their willingness to borrow more has increased materially.”