PRESS ARTICLE: Australian house prices to rise by up to 20 per cent
June 15, 2009. Herald Sun
AUSTRALIAN house
prices will rise by nearly 20 per cent over the next three years,
buoyed by the "current heat" in the market surrounding first home
buyers.
That's the forecast from research house BIS
Shrapnel's Residential Property Prospects report - based on
data from
the Real Estate Institute - released today.
BIS
Shrapnel's Angie Zigomanis said activity in the lower end of
the market
- buoyed by the boost to the first home owners grant and low interest
rates - were generating “green shoots” of recovery.
Graphic:
House price rises around Australia (courtesy news.com.au)
The
report says average house prices in most capital cities will grow by
between 11 and 19 per cent over the next three years.
In
real terms (where prices are adjusted for inflation) the level of
percentage growth is about half.
Mr
Zigomanis, who said actual prices were more indicative than prices
adjusted for inflation, predicts the boost to the first home owners
grant combined with low interest rates would kick start further
activity in the “upgrading” market.
“If
the first home buyers are in the market buying, someone is selling it
to them,” he said.
“We're
expecting that increased first home buyers activity to lead through to
stronger upgrading demand for people upgrading to their next
property,”
he said.
Mr
Zigomanis said once the (boost to the) first home
owners grant expires, and first home buyers drop back out of the
market, there's enough activity in the market so it becomes
self-sustaining.
The
boost to the first home owners grant will finish at the end of this
year.
But
the research, based on Real Estate Institute data, said house prices
would remain relatively stagnant until unemployment peaked around June
2010.
“Everything's
pointed at people jumping in the market”.
“At
the moment we're dealing with a confidence issue,”
he said.
Weak
economic growth and rising unemployment meant Australians were hesitant
to jump into the market, he said.
The
Government forecast in its May Budget that unemployment will rise to
8.5 per cent by mid-2011, leaving one million Australians out of work.
BIS
Shrapnel predicts unemployment to peak “somewhere between 7
and 8 per cent” mid next year.
Mr
Zigomanis said unemployment would impact house prices “more
so from a confidence perspective”.
“Those
people who have the means to buy property, and still have a job to buy
property, they may be concerned about their employment
outlook,” he
said.
Outlook
via region, according to BIS Shrapnel
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
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
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
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
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
Perth
-
Market began slowing in 2007, ahead of eastern states
-
Median house price tripled in five years to 2006
-
Affordability improving; price decline stabilising
-
Median house price $425,000 in June 2009
-
House prices to increase by 12 per cent to 2012
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.
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
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