Extract from The Courier Mail – by Alex Tilbury

THE bottom is not going to fall out of the property market after Christmas when the tinsel and wrapping paper, along with the beefed-up first-home buyers’ boost, is thrown away.

In fact, Brisbane house prices are set to rise by at least 5 per cent in the next three years, according to a new report from QBE LMI, one of only two mortgage insurance companies in Australia.

The LMI Housing Outlook 2101-2012,  forecasts a steady recovery in Brisbane house prices but not a boom.

QBE LMI chief executive Ian Graham said while interest rates were rising “they are still affordable and there will continue to be plenty of demand from first-home buyers”.

“The report doesn’t see first-home buyers leaving the market, maybe easing back a bit, but any slowdown will be replaced by upgraders and investors.

“Investors have been reluctant to buy while the first-home buyers grant was driving prices but they will come back now”.

“Brisbane prices essentially held their ground in the last 12 months, after solid growth.”

After a 36 per cent fall in dwelling commencements in 2008-09, completions are expected to decline in 2009-10, pushing the dwelling stock deficiency to 33,000 dwellings at June 2010, the report showed.

So given an increased housing shortage and a stabilising economy, the median house price is forecast to pick up mildly by 1 per cent to $425,000 by June 2010.

By June 2012, Brisbane’s median house price is forecast to rise to $480,000 or 15 per cent from June 2009.