SYDNEY house prices are tipped to eclipse all other capitals except for Perth over the next three years. Prices in the harbour city will rise 19 per cent – or 8 per cent in real terms – in that time and take Sydney’s median house price from $644,000 now to $770,000 by June 2014, the QBE LMI Housing Outlook 2011-2014 report says.
This compares with 20 per cent in Perth, 16 per cent in Brisbane, 8 per cent in Canberra and only 6 per cent in Melbourne.
The report, prepared by BIS Shrapnel, says the underlying strength of the Australian economy, stable interest rates in the short term, high immigration and a dire shortage of houses in Sydney, will be the main drivers of this growth.
It also predicts that first home buyers will start to re-enter the market in greater numbers next year as the outlook for the economy improves. This will in turn encourage others to return, especially upgraders, as demand for their properties improves.
”Sydney hasn’t fallen in a hole and house price growth has been minimal but has held up over the last 12 months,” said Robert Mellor, the managing director of BIS Shrapnel.