A recent report countered IMF concerns over an Australian real estate bubbles. In a national market that has proven its staying power, top performers like Sydney and Perth could see residential price growth of 20 percent by 2013, while on the other end of the spectrum Melbourne’s gains are likely to be half that. See the following article from Property Wire for more on this.
Despite recent falls in the residential real estate markets in Australia, analysts are predicting strong growth in some areas going into 2012 and beyond.
Australia has been regarded as one of the few global property markets to have withstood the economic downturn well although there have been concerns that relatively high interest rates and the ending of incentives for first time buyers have been cooling the upward trend.
While the country is unlikely to see the soaring capital gains experienced in recent years price growth is expected to be strong and steady.
But it will be a mixed picture, according to the QBE LMI Australian Housing Outlook report. It predicts that Perth, Sydney and Adelaide will be the country’s strongest housing markets in the next three years. Average price increases of 20% are predicted between now and 2013.
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But a lack of economic confidence in Queensland is expected to prohibit capital gains in Brisbane. More modest house price growth is expected in the three years to June 2013 in Brisbane, where prices will rise 15%, the report says.
The report rejected warnings issued last week by the International Monetary Fund that Australia had a property bubble as a leader in the world for household debt and unaffordable housing.
Elsewhere Hobart prices are expected to increase by 13%, Darwin and Canberra by 12%, and Melbourne will lag the country with 9% increases after strong house price gains in the past year.
Some signs of encouragement for first time buyers will help. Ian Graham, the chief executive of QBE Lenders Mortgage Insurance, said some banks had relaxed their loan-to-value ratios from 90 to 95% after first time buyer demand had eased.
And BIS Shrapnel has predicted that the strong resources sector, triggering a greater labor demand, would push interest rates to 9.1%$ in 2013 and this would cause an annual decline in property prices of about 10% across major city markets.
‘There is a greater degree of caution, but people continue to surprise me by what they are prepared to pay for properties, not just in the top but in the middle end,’ said BIS Shrapnel managing director Rob Mellor.
International research firm IPD has pointed out that the Australian property market has bettered the rest of the world over the past decade. IPD managing director for Australia and New Zealand, Anthony De Francesco, said the total return on Australian property was more than 5 %, nudging ahead of the nation’s nearest competitor, Canada.
This article has been republished from Property Wire. You can also view this article at Property Wire, an international real estate news site.