Property market set to improve

The residential property market has been slow recently, but a combination of factors will come together to see the market improve from 2011-12, predicts BIS Shrapnel.

In its findings from its Residential Property Prospects, 2011 to 2014 report, the company is forecasting that residential property prices will be steady through 2011, with some capital cities even showing moderate price growth over the two years to 2013.

“Economic growth is forecast to regain traction through 2011 and continue to accelerate in 2012 and 2013 as resources investment flows through to the rest of the economy,” says BIS Shrapnel senior manager and study author Angie Zigomanis.

“Strengthening employment growth – the unemployment rate is forecast to fall below four per cent in 2013 – will also see net overseas migration inflows turn around, and the underlying demand for new dwellings begin to rise.

“With new dwelling starts currently declining, the corresponding fall in completions means the underlying deficiency of dwellings nationally will increase.

“This will underpin the strength of residential conditions, causing rental markets to tighten and rental growth to pick up, particularly in those markets where it has been weakest in the last couple of years.”

Among the state capitals, BIS Shrapnel forecasts that Sydney, Perth and Brisbane will show the strongest price growth through to 2014.

BIS Shrapnel’s outlook for median house price growth by region:

Sydney: The median house price is forecast to be $640,000 in June 2011, which is a one per cent rise over 2010/11. Total price growth in Sydney over the three years to June 2014 is expected to be 18 per cent.

Melbourne: The median house price is forecast to be $575,000 in June 2011, which is a three per cent rise over 2010/11. Total price growth in Melbourne over the three years to June 2014 is expected to be six per cent.

Brisbane: The median house price is forecast to be $440,000 in June 2011, which is a four per cent decline over 2010/11. Total price growth in Brisbane over the three years to June 2014 is expected to be 15 per cent.

Adelaide: The median house price is forecast to be $410,000 in June 2011. Total price growth in Adelaide over the three years to June 2014 is expected to be eight per cent.

Perth: The median house price is forecast to be $480,000 in June 2011, which is a decline of four per cent over 2010/11. Total price growth in Perth over the three years to June 2014 is expected to be 19 per cent.

Hobart: The median house price is forecast to be $365,000 in June 2011, which is roughly static for the year. Total price growth in Hobart over the three years to June 2014 is expected to be five per cent.

Canberra: The median house price is forecast to be $512,000 in June 2011, which is a two per cent decline over 2010/11. Total price growth in Canberra over the three years to June 2014 is expected to be seven per cent.

Darwin: Total price growth in Darwin over the three years to June 2014 is expected to be seven per cent.

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