NAB has raised its price growth forecasts, tipping rises averaging 18.5% across the capital cities this year. The bank has upgraded its expectations for most cities, with Sydney to rise 21.6% , Melbourne 17.6%, Brisbane 19.5%, Adelaide 17.4%, Perth 11.6% and Hobart 23.5%.

But the NAB report forecasts only moderate growth in 2022, with rises around 4% across the capital cities. In April, the bank predicted Sydney prices would rise only 6% this year, Melbourne 5.5%, Brisbane 6.2%, Adelaide 6%, Perth 5.6% and Hobart 6.1%.

“NAB has revised up its forecasts based on the faster-than-expected growth in prices over recent months,” the report says. “From here we see the monthly pace of growth slowing but continuing at a solid rate.”

The current lockdowns are expected to have a sizeable impact on the economy, but the impact will be transitory. “We remain optimistic that as restrictions are eased, activity will rebound, as has been the case in previous lockdowns,” it says.