A Reuters poll of property analysts sees a 5% rise in Aussie prices this year and another 5% in 2025.
The resilience of the Australian housing market has been a marvel. After a 25% gain during the pandemic, prices fell 9% from the peak only return to all-time highs in short order, despite rate hikes.
The high prices are creating disillusion among young people and first-time home buyers. Add in another 10% and there's no reasonable amount of saving that Australians can do to get ahead of the housing bubble.
"Housing has increasingly become a luxury good, with household affordability around record low levels. This will put a downward force on homeownership rates," said Barrenjoey senior economist Johnathan McMenamin.
"Prior to the pandemic, you had a situation where you still had to earn more than the median income to enter the housing market. But now it's shifted further up that income distribution. The pool of potential buyers has narrowed in the current cycle and that narrowing will likely lead the pool of rentals increasing as well."