After seven years of sluggishness, property markets in several states are to grow with one “set to rally” over 2013/2014, according to a newly released housing outlook.
A positive future for several states was pointed to at yesterday’s QBE LmiHOUSING OUTLOOK launch of Australian Housing Outlook 2012 – 2015 report.
Robert Mellor, managing director of BIS Shrapnel, said that lower interest rates, a more affordable environment and a stable economy are placing property in a prime position for growth.
The only factor that appears to be holding this growth back is confidence, although some of the reasons for this cautiousness “you can’t [always] explain” Mr Mellor said, indicating that a focus on the difficulties being experienced in markets overseas may be a factor.
Price growth of three per cent is forecasted in 2012/2013, and six per cent in 2013/2014 for Sydney, which shows the most bullish figures.
This comes while Brisbane is expecting increasing prices to the tune of eight per cent over 2013/2014 after five per cent growth in the previous year.
Perth is expecting growth of six per cent over 2012/2013, and eight per cent over 2013/2014. Darwin is expected to see five per cent growth over each of the periods.
However, many investors have already noticed the suggestions of an upturn, Mr Mellor said.
“Queensland, Western Australia and New South Wales are showing early signs of improvement.
“Smart investors are on the ground. They can see the vacancy rates tightening and the rents growing, and they get in early.”
He pointed to investors who bought over the last six months as the best placed, with growth ahead for these three states.
Those looking at the Victoria market, however, should be cautious as there is minimal growth predicted. More developments have been earmarked, which will water down demand significantly, he said.
The Adelaide and Hobart markets are also predicted to be sluggish.
Mr Mellor also said that he is “very worried” about the Canberra market.
A slowdown in growth is expected in the majority of markets over the 2014/2015 period.
Jenny Boddington, CEO of QBE LMI, noted in the report’s introduction that the outlook is, overall, “cautiously optimistic” and points to the “best level [for affordability] across most capital cities since the first half of last decade, with the exception of a brief period in 2009” as a reason to consider investing now.