Both Commonwealth Bank and ANZ Bank have upgraded their price forecasts for the rest of this year and beyond, indicating continuing strong uplift into 2022, but with the pace of growth moderating next year. CBA is predicting dwelling prices will grow, on average, 20% this year, with bank economist Gareth Aird suggesting property values will be “largely divorced from economic outcomes” in the second half of 2021.

“We expect home prices to keep rising over the remainder of the year, despite the large negative shock the economy is going through,” he says.

Aird says annual gains will be led by the Sydney market, despite the impacts of prolonged restrictions. CBD expects further growth nationwide in 2022, but at a more moderate 7%, as affordability constraints begin to impact.

Earlier, ANZ forecast house prices to rise more than 20% this year, lifting its forecasts despite the lockdowns. Prices are expected to rise 24% in Canberra by year’s end and 23% in Sydney and Hobart, according to the bank’s latest forecasts. Big gains are expected also in Brisbane (21%) and Melbourne (20%).

ANZ senior economist Felicity Emmett says the big city lockdowns are unlikely to derail the strength of the housing market.