The Urban Developer
AdvertiseEventsWebinarsUrbanity
Industry Excellence
Urban Leader
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
UPCOMING EVENT - INDUSTRIAL AND LOGISTICS SUMMIT 16 OCTOBER, SYDNEY
INDUSTRIAL AND LOGISTICS SUMMIT - TICKETS NOW ON SALE
LEARN MOREDETAILS
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
OtherAna NarvaezWed 11 Sep 19

House Prices Will Rise Up to 10pc: UBS

TUD+ MEMBER CONTENT
a8de1573-3a8f-431a-b0b8-390915351872
SHARE
84
print
Print

UBS economists have upgraded their house price forecasts over the next year by up to 10 per cent after July’s lending figures returned their largest monthly jump since the post-GFC rebound in 2009.

The economists, led by George Tharenou, significantly revised their outlook after the surprise lift in lending figures—home loans recorded a 9 per cent rise in the two months to July—predicting a 5 per cent to 10 per cent growth in house prices.

Previously, the investment bank had flagged a more modest recovery of between 3 per cent and 5 per cent.

Of the four potential scenarios UBS flagged for Australia’s housing markets in May—ranging from “bounce back” to another downturn—Tharenou said that credit growth will now tick up toward the more positive bounce back scenario.

“We expect home loans to lift to 15 per cent to 20 per cent year-on-year over the next year, underpinning stronger house price growth of 5 per cent to 10 per cent.”

And while the recovery trend is still in its early days, with sluggish GDP and weak building approvals putting downward pressure on credit growth, UBS said that the July uptick in lending has significantly offset a record 27 per cent collapse in lending from its August 2017 peak.

The value of new lending commitments increased 5.1 per cent in July, with most of the increase coming from new lending rather than the refinancing of existing loans.

“For both owner-occupiers and investors it was the second successive month in which the value of lending has increased,” Corelogic’s Cameron Kusher said.

Related: Housing Market Wrap Up: Auctions, Approvals and GDP


House prices stabilised, not yet ‘off to the races’

As for further rate cuts, Tharenou said that a strong rebound in prices would present a “material risk” to the Reserve Bank’s willingness to cut the cash rate in October.

Tharenou said updated comments by governor Lowe set to be published later this month are key, while deputy governor Guy Debelle told the investment bank that house prices “[don’t] seem to me to be off to the races”.

“For now the onus is on unemployment and global central bank easing, to get the RBA over the line to cut.

“That said, regulators should ‘stand ready’ to use macroprudential tightening and consider further measures in the future should circumstances change.”

Tharenou said it is possible the Reserve Bank will cut rates at the same time as it tightens the credit reigns to “target” stronger than desired home loans and house prices.

“[And] at the same time support record low household income and limit any upward pressure on the Australian dollar.”

ResidentialAustraliaFinanceReal EstateSector
AUTHOR
Ana Narvaez
The Urban Developer - Editorial Director
More articles by this author
ADVERTISEMENT
TOP STORIES
Salta MD Sam Tarascio
Exclusive

Why Salta Won’t Break Ground on $400m Pipeline

Leon Della Bosca
7 Min
Exclusive

Precinct Proposals Bloom as Brisbane Middle-Ring Sheds its Past

Phil Bartsch
8 Min
Exclusive

Newest Land Lease Player Plots Sector Shake-Up

Taryn Paris
5 Min
Waterloo Affordable Mirvac hero
Exclusive

Affordable Housing Rules Tighten as Proposal Deluge Continues

Clare Burnett
5 Min
Exclusive

Beyond the Aerotropolis: How Airports are Turning into Cities

Taryn Paris
6 Min
View All >
Exclusive

Dark Horse: Self Storage Sector’s Biggest Players

Shravanth Reddy
Planning

State Goes Public with Plans for 10,000 Victorian Homes

Lindsay Saunders
SHMH Penrith hero
Residential

First Stage Filed for $1.1bn Penrith Masterplan

Clare Burnett
Four towers are planned for the site that neighbours a stadium where work has begun on a $300-million rebirth...
LATEST
Exclusive

Dark Horse: Self Storage Sector’s Biggest Players

Shravanth Reddy
3 Min
Planning

State Goes Public with Plans for 10,000 Victorian Homes

Lindsay Saunders
2 Min
SHMH Penrith hero
Residential

First Stage Filed for $1.1bn Penrith Masterplan

Clare Burnett
3 Min
Life Sciences

NSW Healthcare Asset Portfolio Comes to Market

Lindsay Saunders
4 Min
View All >
ADVERTISEMENT
Article originally posted at: https://www.theurbandeveloper.com/articles/ubs-upgrades-its-house-price-forecasts-again-