Global ratings agency Fitch is tipping 5% house price growth in Australia this year.

The growth is a revised prediction from its previous forecast of a drop in prices of up to 10%.

It also lowered its expectation of the level of mortgage arrears this year, after taking into account the “resilience” of homeowners because of pandemic accumulated savings buffers.

The Commonwealth Bank is also expecting growth – up to 3% this year and 5% next year.

It says Perth will be a standout market in 2024 with property values forecast to rise by up to 6%.

Despite rate rises, the majority of buyers are still choosing variable-rate loans according to the ABS.

In April, 94.9% of new and refinanced loans were variable. At the height of the pandemic variable loans dropped to 54% of the market.

Shore Financial, senior credit adviser, Christian Stevens, says borrowers are taking a punt on interest rates dropping next year and don’t want to be locked in.