UBS economists are expecting Australian mortgage rates to hold at a record low of 5 per cent throughout 2014, as unemployment keeps the RBA cash rate down.
In a note to clients today, Scott Haslem, George Tharenou and Delian Entchev raised their house price growth forecasts from 5 per cent to 7 per cent for the year, as the RBA balances weak unemployment and strong inflation numbers.
House prices rose about 10 per cent in 2013.
From the report:
UBS’ forecast of 7 per cent house price growth outstrips recent estimates from Fitch and RP Data by a significant margin.
Fitch pegged 2014 house price growth at 4 per cent earlier this week, with prices most likely to rise in Sydney, Melbourne and Perth, while RP Data CEO Cameron Kusher said prices would rise 5 per cent through the year.