What do the experts say about current home prices?
According to the Whitsunday Times, it was forecasted by the Commonwealth bank in regard to the maximum boom in asset prices:
There will be a predicted increase growth of 8% for house price & 12% for the stock price.
Good news! Unemployment to fall even if Jobkeeper disappears.
These predictions are what the Commonwealth bank calls a “central scenario.”
With that said, there will still be an “upside and downside scenario” that might take place this year.
Both the economy and Commonwealth Bank have a huge correlation with each other as it is Australia’s most significant housing lender.
According to the Commonwealth Bank, it still has $9 billion worth of loans that aren’t being paid back. All of this are mostly concentrated in a single area, which is affected by the pandemic, Victoria.
As you can imagine, Commonwealth Bank is not setting everything up into stone. They have already plotted on what will happen if a downside scenario – or even a severe downside scenario- occurs because they want to prepare the worst in case this happens.
“We could withstand a much more significant economic deterioration than we are anticipating,” he said on Wednesday.
The Commonwealth Bank is cautious but optimistic about what will happen this year. Let us hope that 2021 can finally change our economy and the industry’s trends.
If you wanted to learn more about the Commonwealth Bank’s reported profits last year, check out this Whitsunday Times article for the full details.