DAVY VIEW

This morning’s MyHome report for Q4 2020 shows asking price inflation accelerating to 6%. Furthermore, housing supply has clearly been impaired by COVID-19 disruption, with the stock of homes listed for sale down 28% to 13,900 and housing starts still down 30% in October. Given that demand remains resilient because the labour market damage has been concentrated among younger, part-time and low-paid workers, the market has clearly tightened. Hence, we have revised up our forecast for house price inflation in 2021 to 3% from 1% previously.