The marked reacceleration in house price growth in December, to 5.5% on a three-month annualised basis from negative territory only four months prior, reflects strengthening housing demand as mortgage rates declined toward the end of last year. Absent the announcement of more drastic demand-side policies from this administration to improve housing affordability, though, we doubt price growth can accelerate much further. We are therefore maintaining a cautious view that prices will rise modestly by 4% in 2026 as a whole, which puts us slightly above consensus.
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