Property prices will surge another 20% in 2021: ANZ

In fact, national house prices rose 1.9 per cent month-on-month in July and of the capital cities, Sydney – which has been in lockdown since June – and Brisbane emerged as the fastest growing with a 2.1 per cent increase over the month.

With this momentum, dwelling prices are expected to continue rising through to 2022, according to ANZ senior economist Felicity Emmett.

As a result, ANZ Research has bumped up its national housing price forecast for 2021 to 20.67 per cent, with price growth anticipated for all capital cities.

Canberra is set to see the highest growth at 24.46 per cent, followed by Hobart with 23.5 per cent, Sydney with 23.34 per cent, Brisbane with 21.14 per cent, Melbourne with 20.45 per cent, Darwin with 18.76 per cent, Adelaide with 15.79 per cent, and Perth with 11.22 per cent.

But moving forward, there could be some slow down in growth, driven largely by “slightly higher mortgage rates, decreasing affordability, and the potential for macro-prudential tightening”, ANZ senior economist Adelaide Timbrell said.

By 2022, price growth is forecasted to grow by only 6.71 per cent across Australia.

Still, the current momentum in price suggests that price growth in both 2021 and 2022 could outpace their forecasts, particularly if macro-prudential tightening is delayed, according to Ms Timbrell.

However, she noted that “the increased uncertainty around the Delta variant and extended lockdowns could pose some offsetting downside risk” in the future.