BIS SHRAPNEL IS FORECASTING PERTH’S MEDIAN HOUSE PRICE TO RISE BY A TOTAL 15 PER CENT OVER THE THREE YEARS TO JUNE 2016 (FROM $520K TO $598K), ALTHOUGH THIS WILL BE PRIMARILY CONCENTRATED IN 2013/14 AND 2014/15
The report Residential Property Prospects, 2013 to 2016 predicts that the emerging momentum in price growth in Perth is expected to last another 12 to 18 months before growth in the Western Australian economy begins to slow more sharply as projects in the resource sector increasingly are concluded. Price growth is forecast to begin to tail away through 2015 and into 2016 as migration and population growth slows and sentiment in the residential sector turns in line with economic conditions.
According to BIS Shrapnel, after being in the doldrums since peaking in early 2007, the Perth market showed signs of a recovery in 2012/13, with the city’s estimated median house price of $520,000 at June 2013 representing a rise of seven per cent in the year.
“The improvement has coincided with a pick up in first home buyer demand, which in the year to March 2013 is up by 30 per cent on the previous 12-month period. The stronger demand at the more affordable end of the market is now beginning to flow through to higher price points as existing home occupiers trade up.
“Demand has been assisted by strong income growth in Western Australia through the downturn in prices, which together with reductions in interest rates have resulted in a significant improvement to affordability. Pent up demand has also been rising due to strong population growth which has not yet been met by new dwelling supply, causing tight vacancy rates and strong rental growth, which in turn has encouraged both first home buyers and investors into the market.”
Around the nation, house price forecasts are mixed. Price growth is expected to be strong in Sydney (19 per cent), Brisbane (17 per cent) and Darwin (10 per cent) where there is an undersupply of dwellings. Whilst Adelaide, Melbourne and Canberra prices are forecast to increase only six, five and less than one per cent, respectively, over the three year period.