Extract from The Australian: October 14, 2009
BRISBANE’S housing prices will rise 15 per cent by the middle of 2012, despite interest rates starting to trend upwards, according to a new report.
“Double-digit house price growth is forecast across all capital cities from June 2009 to June 2012, particularly in those markets with positive affordability,” according to QBE LMI chief executive Ian Graham.
Mr Graham anticipates that towards the end of 2009, property investors and home owners looking to upgrade will take over from the first-home buyer market, which has dominated the Brisbane housing market in the past.
Despite the effect of the global financial crisis on the state, Mr Graham expects overall employment to rise again, boosting household income and renewing faith in residential property.
In Melbourne, price rises of 19 per cent by mid-2012 are forecast, Darwin 17 per cent, Brisbane and Hobart 15 per cent, Perth and Canberra 12 per cent.
“Despite a 0.25 per cent rate rise in the first week of October, housing interest rates are expected to remain at a stimulatory level for some time, with the low interest rate environment remaining supportive of the first-home buyer,” Mr Graham said.
The ending of the increased first-home owner grant boost scheme in December could cause prices at the lower end of the market to dip in the first quarter, but pent-up demand would mean only a short-term easing, he said.
Housing markets have turned quickly with the Australian Bureau of Statistics showing capital city median prices fell 1.4 per cent in the year to June.
Mr Graham said that from later next year, comparatively low interest rates and improved economic conditions would speed up the growth in house prices.
“A broad-based recovery is forecast from the second half of 2010 as conditions in the labour market stabilise and investors and buyers are attracted back into the market by low interest rates and high rental yields.”
However, it will be nothing like the last market peaks where prices rose 24 per cent in Sydney in its boom year of 2002, 31 per cent in Brisbane in 2004 and 36 per cent in Perth during 2006, Mr Graham said.
