The St George Economics report released last week included preliminary forecasts of a 7-10 per cent drop this year, followed by a return to growth, starting with 2 per cent in 2021.
This was contingent on growing confidence in our economic recovery, and would be boosted by low interest rates, which would fuel buyer demand, reported realestate.com.au.
“Stimulus measures will provide fuel for rapid housing price growth once the broader economic recovery begins,” the report said.
On the topic of broader economic recovery, the Reserve Bank of Australia has outlined a scenario in which Australia could see a sharp 6-7 per cent increase in our GDP next year – that’s our gross domestic product, a key measure of economic growth.
The RBA Governor has said the forecast is contingent on social distancing restrictions easing by the middle of this year, moneymanagement.com.au reported.
“We could expect the economy to begin its bounce-back in the September quarter and for that bounce-back to strengthen from there,” he said. “If this is how things play out, the economy could be expected to grow very strongly next year, with GDP growth of perhaps 6-7%, after a fall of around 6% this year.”
But he said we should be realistic that the recovery will take some time, and some businesses may not recover.
This meant unemployment could sit above 6 per cent for the next couple of years, down from a predicted 10 per cent in June 2020. But this is a far better outcome than might have been the case without the Government’s JobKeeper wage subsidy which has cushioned the blow.
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