Australians are becoming increasingly enthusiastic about buying property. The Commonwealth Bank’s latest Household Spending Intentions report has provided further evidence of a strong uptrend in home-buying.

The upcycle started in the middle of the year, continued into October and is closer to the record highs witnessed during the first half of 2017, when Sydney and Melbourne markets were booming.

CBA chief economist Michael Blythe says this is consistent with the ongoing increase in dwelling prices in major cities and the bottoming out of residential construction activity.

“The ongoing improvement in the home-buying intentions series indicates that the low point for residential building construction will probably be around mid-2020,” he says.

HSBC economists are now forecasting that Australian house prices will rise, on average, between 5% and 9% in 2020, a significant revision compared to its previous forecasts.

Modest gains of up to 4% were previously tipped by the bank. The decision to reassess predictions comes after the market turned a sharp corner in the middle of the year and began its rapid growth in June, spurred by several changes to lending an improved confidence spread through the market.

Paul Bloxham, HSBC’s chief economist, says rising demand at a time of low supply is partly to blame.

“We expect housing prices to continue to rise in 2020, underpinned by mortgage rates, which are likely to stay low for a considerable period of time,” Bloxham says.

“However, while we expect to see housing demand remain strong, we also expect the recent strong housing price gains in major cities to entice more sellers, increasing available supply and housing turnover. This should temper the recent pace of housing price gains in Sydney and Melbourne from their current very rapid monthly rates.”

Real estate classifieds business REA Group has also confirmed that the residential market is picking up steam.

The company, majority owned by News Corp Australia, publisher of The Australian, gave an upbeat outlook at its annual meeting in Melbourne, against a backdrop of rising property listings after coming through a lean period earlier this year.

REA and rival Domain Holdings Group are benefiting from the upswing in sentiment that will likely to drive a lift in selling next year, a turnaround from a year bogged down by state and federal elections and fears about the ALP’s proposed negative gearing and capital gains tax policies.