PHOTO: The possibility of younger people breaking into the property market was short-lived during the coronavirus pandemic.(Reuters: David Gray)

For a brief, flickering moment, the dream of a generation seemed within reach.

House prices were on the cusp of one of the biggest falls in decades, hit by what was shaping up to be a near-lethal combination of mass unemployment and zero immigration.

After decades of a seemingly unstoppable real estate bubble, the prospect of a sustained fall in housing prices brought a glimmer of hope to those under 35 that home ownership may become a possibility if they could hold on to a job.

Even relatively conservative analysts were forecasting house price declines of 20 per cent and back in May our biggest bank, the Commonwealth Bank of Australia, pencilled in the prospect of a 32 per cent collapse.

But the decline was to be short-lived and far more modest.

With interest rates now barely above zero, plus an effective health response to the pandemic and Federal Government stimulus mitigating the worst of the economic calamity, real estate quickly bounced back.

For the first time in years, housing prices in all capital cities are rising simultaneously and regional real estate is experiencing a sustained lift as workers, having discovered they can operate just as effectively away from the office, are seeking cheaper rural and regional living arrangements.

Housing credit suddenly and unexpectedly has experienced an enormous growth spurt which has coincided with the Federal Government’s Homebuilder grant.

And let’s not forget the Government proposal to unwind responsible lending laws, giving the banks open slather when it comes to home loans.

Owner-occupier home loan commitments hit a record $22.7 billion in October, according to the Australia Bureau of Statistics (ABS) data released last week, up more than 30 per cent from a year ago.

Chart showing the great increases in house prices across Australia.
House prices in Australia’s major cities have most increased since 2006.(ABC News: Alistair Kroie)

We are not alone. Across the ditch, New Zealand housing prices are on a tear.