The strength is largely being driven by owner-occupiers with low interest rates appealing to buyers in secure employment. This is the case for upgraders as well as first home buyers.
"[In 2021], ANZ Research expects housing price gains of around 9 per cent across the capital cities."
The decline in rates is more marked than the cut in the Reserve Bank of Australia’s (RBA) cash rate would imply.
Since May 2019, the cash rate has declined 140 basis points (bps). The advertised variable mortgage rate has declined only around 85bps but 3-year fixed owner-occupier rates have declined around 180bps. On ANZ Research’s estimates, the 3-year fixed rate has nearly halved over the past two years, from 4.1 per cent in late 2018 to around 2.1 per cent currently.
Mortgage holders are taking advantage of these lower rates, flocking into fixed mortgages.