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This year’s strong housing market will continue into 2010, according to QBE Lenders’ Mortgage Insurance HOUSING OUTLOOK 2010 – 2012 report.
The research, written by BIS Shrapnel, confirms that current low interest rates have alleviated the mortgage pressure on households, bringing housing affordability back to its most attractive level for almost a decade.
Prices at the top end of the market have fallen more than average houses, giving home owners the opportunity to trade up to their next dwelling after selling their current house into the buoyant first home buyer market.
The strong rental environment and stabilisation of house prices are favourable factors for property investors to also come back into the market.
“The outlook for the housing market is also positive for those who have recently entered the market, particularly first home buyers.
Low interest rates, solid growth in rents and housing shortages will create favourable conditions for a strong recovery in residential property prices in the second half of 2010, through to 2012,” says Ian Graham, CEO of QBE LMI.
”Double digit house price growth is forecast across all capital cities from June 2009 to June 2012, particularly in those markets with positive affordability (Adelaide +23%) and a continuing undersupply of housing (Sydney +21% and Melbourne +19%).”
”Price growth in Brisbane is forecast at +15% as moderate economic conditions offset the affordability advantage.
Lower growth is projected for Perth (+12%), influenced by a decline in investment in the resource sector after the record levels seen in recent years” said Mr Graham.
“Despite a 0.25% 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.
Demand from first home buyers is expected to continue, notwithstanding the expiration of the First Home Owner Grant Boost Scheme in December 2009.”
But new figures from Residex show house prices have grown by 1.7% across the country during September in a fifth consecutive monthly gain.
The increase also pushes the quarterly growth rate to 4.2%, the fastest rate since December 2007, while over the past six months prices have now risen at an annual pace of 14.3%.
In the capital cities, prices rose in Melbourne by 2.9%, with Sydney following at 1.9% for September and 5.7% growth for the last quarter. In Adelaide, prices grew by 1.2% and 2.2% for the quarter.
Prices dropped in Brisbane by 0.6% in September, with flat growth over the past three months, while Perth prices managed to rise during September but are still down by 4.5% for the year.
Additionally, houses are now catching up to units in terms of growth, with 1.2% growth in September and 2.7% over the past there months.
Westpac senior economist Matthew Hassan said while the growth is strong, the demand in the housing market is expected to fall as the first home buyer's give way to investors.
onthehouse.com.au offers property sales data for you to do your property research.
Based on information provided by and with the permission of the Western Australian Land Information Authority (2015) trading as Landgate.