Updating its price predictions, ANZ is now predicting stronger growth in the property market.

This is despite the big four bank’s forecasts showing worsening economic conditions, with a sharp contraction in gross domestic product in the September quarter and the possibility of a double-dip recession by Christmas.

Prior to the upgraded forecast, ANZ anticipated gains of 15 per cent to 20 per cent for the year.

The bank is now also predicting growth into 2022, albeit at a slower pace, with gains of 7 per cent predicted prior to regulators changing macro-prudential policies.

By 2023, all capitals are predicted to post 3 per cent house price gains.

“While the current momentum in prices suggests that growth in both 2021 and 2022 could outpace our forecasts, particularly if macro-prudential tightening is delayed, the increased uncertainty around Delta and extended lockdowns pose some offsetting downside risk,” senior economist Felicity Emmett said.

Leading the way is the nation’s capital, with Canberra expected to rise by 24 per cent by the year’s end, followed by 23 per cent gains in Sydney and Hobart.

Brisbane and Melbourne are also predicted to have 20 per cent-plus gains.

ANZ is the latest of the big banks to revise its forecasts upwards amid lockdowns, with its senior economist believing the impacts of these lockdowns will not be felt on the property market.

“When you look at some of the leading indicators, auction clearance rates, sales to listing ratios, you can see the market is still very, very tight and there hasn’t been much of a drop-off in demand or interest in the face of these quite heavy lockdowns,” Ms Emmett said.

In Melbourne, where the auction clearance rate had been harder hit by lockdown restrictions – which include a complete ban on property inspections – prices were still holding up, Ms Emmett added.

Housing finance has risen by 83 per cent in the year through June, while investors are returning to the market in larger numbers.

In the six months to June, lending to housing investors rose by 55 per cent, more than double the growth rate of a year earlier, ANZ said.

More people are also seeking detached houses because they are working from home during the pandemic, and they expect to continue doing so for a long time.

However, strong house price growth is set to come by way of affordability, with Ms Emmett noting the strong house price gains are coming at the expense of the have-nots.

“Affordability constraints are now biting, and these are likely to see first home buyer lending continue to drift lower,” she said.

“First home buyers are pulling out of the market, and they’re being replaced by investors. Clearly, the price rises that we’ve seen, particularly through this year, I think, just make it really difficult for first home buyers.”

She said the research also suggests that young Aussies are turning to the bank of mum and dad for more help than ever before, which she acknowledged is not a longer-term solution.

“The average amount of parental assistance for home deposits has grown to approximately $90,000,” she said.

“If significant parental assistance for first home buyers is as common and large as the survey suggests, this is a very negative signal for both affordability and intergenerational inequality.”