Big increases in house prices have been forecast, with the regions set to outperform and the luxury end expected to be the star in the major cities.

REA’s Property Outlook Report 2021 says Australians have never been wealthier, which is reflected in the “rise and rise” of the luxury property market. “This unique trend of house price growth during a recession did not occur during the GFC or the early 1990s recession,” the report says. “Towards the end of 2020, views per listing on for homes over $10m increased 150%.”

The report says investors are returning to the market, with a focus on regional Australia, which will again outperform the rest of the country. While views per listing on rose 16% in capital cities during the second half of 2020, the increase in regional Australia was 44%.

Westpac economists have lifted their forecast for dwelling prices and are now expecting 10% gains in both 2021 and 2022. Westpac chief economist Bill Evans expects the market will flatten in 2023.