This may imply that firms’ short-term sales price expectations, although still low, may begin to rise as the recovery process improves. Moreover, households’ price expectations tend to be substantially high owing to the upward bias, and they deviate substantially from actual price performance.
This reflects both the low level of interest rates and a shift in preferences for how and where people want to live. The available data suggest that average housing prices in Wagga have increased by around 20 per cent over the past year, similar to the average increase in the capital cities (Graph 10).