The forecast from research BIS Shrapnel Residential Property Prospectus report based on data from the Real Estate Institute released yesterday has shown that Australian house prices will rise by nearly 20 per cent over the next three years.
Angie Zigomanis from BIS Shrapnel said that the activity in the lower end of the market was due to the first home owners grant and low interest rates.
The report indicated that the average house price in most capital cities will grow by between 11 and 19 per cent over the next three years. Mr. Zigomanis went on to say that if first home buyers were in the market buying, then someone was selling it to them, and that they were expecting that increased first home buyers activity would lead through to stronger upgrading demand for upgrading to their next property. The first home owners grant will finish at the end of this year.
Research based on Real Estate Institute data, has shown that prices would remain relatively stagnant until unemployment peaked around June 2010.
Weak economic growth and rising unemployment were the reason Australians were reluctant to venture into the market. The Government forecasted in their May budget that unemployment would rise to 8.5 per cent by mid 2011, leaving one million Australians unemployed.
BIS Shrapnel has predicted that unemployment would peak somewhere between 7 and 8 per cent by the middle of next year.
House Price Analysis via region according to BIS Shrapnel
House Prices Sydney
- Median house price $530,000 in June 2009
- New home construction at 50 year lows
- Total price growth forecast at 19 per cent to 2012
- Strongest growth at end of three year period.
House Prices Melbourne
- Median house price $425,000 in June 2009-06-12
- A fall of 6 per cent for the financial year
- Pick up in "upgrader"activity expected
- Nearly 20 per cent increase in prices to 2012
House Prices Brisbane
- Median house price $391,000 in June 2009
- Down 7 per cent for financial year
- Interstate migration to boost modest price growth
- House prices to rise by 16 per cent to 2012
House Prices Gold Coast and Sunshine Coast
- House prices generally move in tandem with Brisbane
- Expected to grow by 14 per cent to 2011
- Price growth to lag slightly behind Brisbane
House Prices Adelaide
- Experienced double digit growth to 2007
- Now down 3 per cent to $360,000 in June 2009
- Lowest median house price of mainland state capitals
- Incentives "having the greatest financial impact"
- Tipped to jump 19 per cent to 2012
House Prices Perth
- Market began slowing in 2007, ahead of Eastern states
- Median house price tripled in five years to 2006
- Affordability improving; price decline stabilizing
- Median house price $425,000 in June 2009
- House prices to increase by 12 per cent to 2012
House Prices Hobart
- Median house price declined marginally in 2008
- Increased interstate migration attributed to "tree-change" mentality
- Average house price $335,000 in June 2009
- To jump 15 per cent in the next three years to 2012
House Prices Darwin
- Only capital city to record a rise in median house prices in 2008
- Average house price $470,000 in June 2009
- NT reliant on oil, gas hasn't weakened as much as other economies
- Gap in investments to kill short-term price growth
- To grow by 11 per cent in three years to 2012