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Double digit house price growth predicted nationally

15/06/2009

Property investors can expect double digit house price growth over the next three years, according to a leading economic forecaster's report this week.

BIS Shrapnel predicted that the top performing cities will be Sydney, Melbourne, and Adelaide -- all picked to see their house prices rise 19%. BIS Shrapnel also forecast Newcastle will show the strongest house price growth of any regional area through 2012, at 22%. The study author, Angie Zigomanis, said the recovery would start next year with the return of investors to the property market, something that has already slowly been happening.

"From here, recovery in housing demand is expected to broaden and deepen," Zigomanis said. "By the end of 2009, strong turnover of the most affordable properties will be flowing through into the bulk of households positioned towards the middle of the market, as people who have sold their existing dwellings to first homebuyers upgrade their next home."

Darwin, which has shown some the best growth lately, was slated to show the least growth by 2012 or any capital city, at 11%. Perth was not far ahead, at 12%.

Zigomanis said housing construction will the primary driver for the recovery of Australia's economy next year.

"Australia needs growth in property prices to generate a sustained rise in construction of new dwellings," he said.

He also predicted interest rates to remain low to support prices until a recovery is well under way.

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