According to BIS Shrapnel’s report into the predicted growth of the residential property market from 2012-15, house prices in Perth, Brisbane, Sydney and Darwin will start to "gain traction" from next year, with further improvement in the sector in 2014 and 2015.
Perth and Brisbane are tipped to record the highest growth in median house prices over the next three years at 22 per cent and 20 per cent respectively followed by Sydney at 17 per cent and Darwin at 15 per cent. However, house prices in the capital cities of non-mining states are expected to remain sluggish to say the least.
Forecast median values for other capitals are Adelaide (9 per cent) Hobart (5 per cent) and Melbourne (3 per cent), while Canberra residential property prices are expected to rise by just 1 per cent over the next three
years. Home buyers are also expected to become more active over the next three years as conditions in the property market improve.
BIS Shrapnel senior manager and study author, Angie Zigomanis, said while consumers remained nervous about the general economy, the next three years could also see a surge in the number of first-home buyers entering the market. "The improvement in affordability from lower interest rates may stabilise house prices in this environment."
Zigomanis said lower interest rates and more overseas migrants coming to live in Australia were also indications that some of the negative factors that pushed house prices down in 2010 and 2011 were beginning to turn around.
"With the local economic and employment outlook becoming more positive, and some stabilisation and improvement overseas, purchasers are forecast to wade back into the market in greater numbers, translating to greater sales volumes and a pick-up in price growth over 2013/14 and into 2014/15."
However, without any supply pressures, median house prices in Melbourne, Adelaide, Hobart and Canberra are forecast to show little change and decline in real terms over the next three years," Mr Zigomanis said.
Investors should also increasingly enter the market once there is evidence that prices have bottomed out, and will also be supported by solid rental growth."