Turn of events that could drive up home prices again

There is a chance that prices could start rising again after the federal election due to a range of market conditions.Soaring inflation, a return to overseas migration and stronger than expected wages growth could all contribute to a recovery in the Sydney property market, depending on how much interest rates go up over the next seven months, property experts have said.MORE: Where voters are hit hardest by home price risesWestern Sydney braces for housing crisis This comes after more than 25 per cent growth across Sydney last year, with house values in some suburbs surging up to 40 per cent over the past 12 months. PropTrack economist Paul Ryan said it wasn’t so much a matter of when the Reserve Bank increased interest rates, but the extent to which they did it.“It will matter whether the cash rate is 1 per cent or 2 per cent at the end of the year,” Mr Ryan said.He said while there was a small chance that the Sydney market could go through a recovery after a general hiatus during the election, the factors that would bring this to play were unlikely.“If the RBA doesn’t increase rates quite as quickly and we end up getting the really strong wages growth that people are expecting based on labour market conditions, that could maybe point to more growth on the horizon,” he said.“The consensus seems to be that we’re more likely to have a flat kind of year, potentially with the prospect of some falls.”SQM research director Louis Christopher said the market could “go either way” following the election. “There’s quite a few mixed things in the market place right now which potentially could create a new recovery in the market or potentially could deepen the downturn, the softening of the market,” he said.He said a delay in the cash rate rising, alongside surging inflation and more homebuyer stimulus could result in activity picking up in Sydney during the second half of the year.“If, on the other hand, we see aggressively rising interest rates post the election, that could aggravate the current soft landing that we are getting.”Property expert Terry Ryder from Hotspotting.com.au said the boom was “far from over.”“When I look at the numbers, I see the markets are still very strong in Australia,” he said.The return of international migration was just one of many factors that could lead to a recovery in the Sydney market, with or without a cash rate rise, he said.Other factors included the continued rollout of infrastructure projects, the return of foreign and domestic investors and tighter vacancy rates caused in part by the return of international students.“Economists keep rabbiting on about interest rates as if it’s the only factor and I just think it’s kindergarten analysis,” he said.He said most of the factors that would lead to price growth in 2022 were already in place – it was just a matter of how much affordability and housing supply came into play.MORE: Sydney crane record a good, yet sobering signWhere you can find a home for less than $380 a weekHome sold on Facebook for double the price Via news.com.au — Australia’s leading news site https://www.news.com.au