Perth house prices set for biggest climb

The median price for a Perth house will pass $600,000 within three years as the city’s property market reclaims its title as the strongest and fastest growing in the country, a new report predicts.

The BIS Shrapnel residential property report forecasts house prices in Perth will climb an average 7 per cent a year for three years, pushing the median price to $610,000 from $500,000 today.

No other capital is expected to enjoy such strong capital growth, with even higher interest rates unlikely to slow the Perth market as much as others.

Senior project manager Angie Zigomanis said even though the Perth market slowed before other cities in 2007, conditions were improving on the back of another resources boom. Money flowing from commodities would soon push up house prices across Perth.

“With prices below peak levels in real terms and income in Perth set to grow substantially as the next round of resource expansion projects get up and running, solid price growth should continue,” he said.

“Nevertheless, further increases in interest rates will prevent the boom in prices that we saw in the last upturn.”

Mr Zigomanis said the median house price would climb 22 per cent by the middle of 2013. This growth would be quicker if the Reserve Bank did not increase interest rates in the next six to 12 months.

Growth at that rate would surpass other capitals such as Sydney (up 20 per cent), Melbourne (11 per cent), Brisbane (12 per cent), Adelaide (20 per cent), Hobart (12 per cent), Canberra (14 per cent) and Darwin (12 per cent).

House prices climbed rapidly through the second half of last year and into the first four months of this year.

Mr Zigomanis said this was directly because of record low interest rates in response to the global financial crisis and a “pull forward” of demand from the first-homeowner’s grant. Not only would house prices outpace inflation, they would affect rents.

“Even though overseas migration inflows are steadily easing, a deficiency of stock is still in place with dwelling construction below underlying trend,” he said.

Recent Australian Bureau of Statistics figures show a fall in loans for people buying homes but an increase in loans for investment properties. Financial market analysts do not expect official interest rates to rise until May next year.

source  :  www.thewest.com.au

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Minister wants to flood land market

New Housing Minister Bill Marmion has shocked the property market by saying he wants to flood WA with housing lots to cut home prices.

In a speech to Parliament that has set alarm bells ringing throughout the real estate industry, Mr Marmion said the Barnett Government’s aim was to “bring house prices down”.

“The Department of Land is looking at this issue very closely,” he said.

“It owns land and it is looking at its land stocks and will release as much land as possible.

“That will reduce the pressure on housing supplies. Our aim is to bring the median house price down and to have it lower than the median house price in other States.”

Mr Marmion, who took over the job last month after Troy Buswell was sacked, said the only thing the Government could do to achieve its aim was “release more land and houses”. He refused to elaborate on his comments yesterday.

March quarter figures from RP Data put the median house price in Perth at $480,000, equal to Darwin, but behind Sydney ($500,000) and nation-leading Canberra ($510,800).

Hobart had the cheapest prices in Australia at $323,750.

The State Government established an Office of Land and Housing Supply in Thursday’s Budget and is reviewing available government land which Premier Colin Barnett said would “achieve a comprehensive and co-ordinated approach to housing affordability issues”.

Shadow housing minister Mark McGowan warned the policy could result in houses being worth less than what people paid for them.

“If people go into negative equity with their house, that’s the worst possible outcome,” he said.

Real Estate Institute of WA chief executive Anne Arnold said Australians stored their wealth in the family home and it would be “politically unwise for any government to go down that path”.

But the plan won support from developer Nigel Satterley, who said land needed to become more affordable.

But he said the policy would not cut the price of existing houses.

“We’re on the cusp of a block shortage and whatever the Government can do should be encouraged,” Mr Satterley said.

Analysts at RP Data found in April that houses in Perth’s cheapest suburbs cost at least $60,000 more than those in the most affordable areas in the other major Australian cities.

Hillman was named the cheapest suburb in Perth, with a median house price of $280,000 – higher than the cheapest suburb in Adelaide ($200,000), Brisbane ($205,000), Melbourne ($218,000) and Sydney ($219,000).

Perth had less than 10 per cent of its 259 suburbs with a median house price under $350,000, compared with more than 20 per cent in all other big cities.

Blocks of land in Perth were the most expensive in Australia, according to a recent analysis by RP Data and the Housing Industry Association, with a single square metre of “prime earth” now costing an average of $521.

Source  :  www.thewest.com.au

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House prices tipped to lift by 2012

HOUSE prices could rise by as much as 22 per cent during the next three years, an economic forecaster says.  

”The conditions are ripe for a sustained recovery in residential property prices,” according to BIS Shrapnel’s Residential Property Prospects, 2009 to 2012, report.

”Low interest rates, solid growth in rents and housing shortages are evident in most markets.

”However, the current economic malaise will mean confidence will only recover slowly during 2009/10.”

BIS Shrapnel senior project manager and study author Angie Zigomanis said that, at this stage, all of the action was occurring at the lower-priced end of the market.

This is due to a surge in first-home buyer demand as a result of the federal government’s first home owner boost scheme and low interest rates, he said.

BIS Shrapnel forecasts there will be 180,000 first-home buyers in 2009.

Although first-home buyer demand was expected to ease after the expiry of the government’s boost scheme at the end of 2009, upgraders and investors were expected to take the baton, Mr Zigomanis said.

”We expect rising confidence in the prospects for an economic recovery in 2010, so investors are likely to return in greater numbers, attracted by increased rental returns and low interest rates.”

Among the state capitals, Sydney, Melbourne and Adelaide will show the strongest price growth over the next three years, at 19 per cent.

More moderate growth is expected in Brisbane, Hobart, and Canberra, while price growth in Perth and Darwin is expected to be weak as the local economies of these cities are impacted by a decline in investment spending in the resources sector.

BIS Shrapnel estimates Sydney’s median house price at June 2009 to be $530,000, and predicts it will rise by mid-2012 to $630,000. Melbourne’s current median house price is estimated at $425,000, rising to $507,000 by June 2012.

In Adelaide, the median price is estimated at $360,000 and predicted to climb to $430,000 over the three years.

Among other cities around Australia, Newcastle and Wollongong are expected to benefit from the migration of residents from Sydney over the coming years.

The median house price in Newcastle is expected to soar 22 per cent over the three years, while Wollongong is forecast to see growth of 20 per cent in the same period.

In Brisbane, the average house is estimated to cost $391,000 now and is expected to cost $455,000 by mid-2012, an increase of 16 per cent.

Hobart’s median house price is estimated to be $335,000 and will rise by 15 per cent to $385,000 over the three year period.

An average house in Canberra is estimated to cost $440,000, increasing to $515,000 by 2012, a rise of 17 per cent.

In Perth, the estimated median house price is $425,000, expected to reach $475,000 in three years, up 12 per cent.

Darwin’s forecast median house price is $470,000, predicted to show an increase of 11 per cent over the three years.

For the Gold Coast, the Sunshine Coast and Cairns, BIS Shrapnel forecasts prices will increase by 14 per cent, while Townsville prices are expected to grow 13 per cent over the three years.

Source  :  www.news.com.au

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