The RBA’s latest Statement on Monetary Policy released on Friday noted housing prices have been rising in all major markets, after declining during the initial COVID outbreak last year.
“Strong price growth continued through July, including in Sydney, such that national housing prices were around 15% higher than the start of the year,” the RBA said.
The RBA also noted growth in housing credit has picked up and demand for finance from investors has also increased recently, on top of the strong demand from first-home buyers and existing owner occupiers.
Economists at three of the four big banks have just lifted their forecasts for Australian dwelling prices in 2021 after a stronger-than-expected surge in the first half of the year, with price growth expected to slow down in 2022.
Commonwealth Bank of Australia economists now expect national prices to jump by 20% this year, while National Australia Bank and Westpac economists forecast gains of 18.5% and 18%, respectively.
Mr Ryan said many sellers are holding off listing on the market because they want to sell their properties under optimum selling conditions, and sales had started to fall in Sydney.
“The market in Sydney is going to go into a bit of a dormant state,” Mr Ryan said.
“Some properties will sell and I don’t think there will be bargain conditions. Sellers know that the market is hot.
“Prices are likely to hold up, you’ll get most sales being delayed and everyone will kind of wait out the winter and sell afterwards.”