Property Market Ready for Take Off

Posted on December 19th, 2012 · Posted in News

Australian house prices are forecast to rise next year as increased affordability and interest rate cuts entice buyers into the market, according to a property industry report.

House prices are expected to rise between 3-5% across Australia next year, with Perth leading the charge.  The prediction by Australian Property Monitors comes after interest rates were cut to their equal-lowest on record in hope of spurring the lifeless economy.

It follows a weak period for the market, with median house prices falling last quarter. According to a separate report, sponsored by the Real Estate Institute of Australia and Bendigo Bank, prices dipped 0.6% in the three months to the end of September, compared with the previous quarter. House prices have not grown over the past year, the report says. However, the average price for other dwellings, including apartments, rose 1.2%.  The report states Melbourne is the third most expensive city for median house prices, at $530,000, behind Darwin on $568,300 and Sydney on $641,890. The lowest median was Hobart, at $340,000.

APM senior economist Andrew Wilson said next year should continue to build on the modest gains recorded over the past year, when the median house price rose a mere 1%.  Mr Wilson said that Perth is tipped to be the best performer.  He said record levels of immigration, housing shortages and soaring rents, as well as its exposure to the relative strength of mining sector, is likely to lift the Perth market and send prices higher.

Sydney is expected to achieve growth of about 3-5% – the same as forecast by APM for the city in 2011.  Prices in Brisbane are also expected to rise between 3-5% next year after a poor result this year. Melbourne and Canberra’s markets are expected to record no growth over the coming year or at most 3%.  Darwin’s housing market would still be subject to wild swings in median prices over the year, but the outlook is still on the up, while no change is expected in Adelaide and Hobart prices next year.

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