Growth in the Residential Market

In a recent report released by economic forecaster BIS Shrapnel, it is expected that there will be price growth for residential properties over the next three years.

However, this growth is not expected to be at levels we have seen in the past few years.

According to the company’s Residential Property Prospects, 2010 to 2013 report, lending activity is already easing and first-home buyer demand is down but, despite this, the company doesn’t expect house prices to fall.

BIS Shrapnel says this is mainly due to investors returning to the market and picking up some of the reduction in owner-occupier demand – loans to investors were up by an annual 26 per cent in the March quarter of this year.

So what does BIS Shrapnel predict in the main centres?

Sydney
It is forecasting total price growth in Sydney over the three years to June 2013 to be 20 per cent, representing average growth of around six per cent per annum.

Newcastle and Wollongong
Total growth in the median house price in Newcastle over the three years to June 2013 is forecast to reach 18 per cent, while the total rise for Wollongong is forecast to be 17 per cent.

Melbourne
The forecast is for Melbourne’s median house price to rise by a total of 11 per cent over the three-year period to June 2013, or a modest 3.5 per cent per annum.

Brisbane
The overall price growth to 2012/13 is expected to be only moderate, totalling 12 per cent in the three years, or just under four per cent per annum.

Gold Coast and Sunshine Coast
BIS Shrapnel forecasts prices will increase by 11 per cent over the three years to June 2013, with a rise of 13 per cent anticipated for the Sunshine Coast. Price growth on the Gold Coast is expected to be marginally lower than Brisbane given its higher median house price, while on the Sunshine Coast it will be slightly stronger.

Townsville and Cairns
Cumulative price growth over the three years to 2013 is expected to be 17 per cent for Townsville and 16 per cent for Cairns.

Adelaide
It is forecasted that Adelaide’s median house price will rise by 20 per cent over the three years to June 2013, an increase averaging three per cent per annum.

Perth
BIS Shrapnel forecasts Perth house prices to rise by 22 per cent over the three years to June 2013, representing an annual average rise of seven per cent per annum.

Hobart
Hobart’s median house price is forecast to rise by 12 per cent over the 2009 to 2012 period, reflecting an average increase of four per cent per annum.

Canberra
In Canberra, prices are forecast to increase by a total of 14 per cent over the three years to June 2013, which reflects a rise of 4.5 per cent per annum.

Darwin
Total price growth of 12 per cent is forecast over the three years to June 2013, or an average of four per cent per annum.

For more details and highlights of the Residential Property Prospects, 2010 – 2013, click here.