Property market ready for take-off
AUSTRALIAN house prices are forecast to rise next year as increased affordability and interest rate cuts entice buyers into the market, according to a property industry report.
House prices are expected to rise between 3 and 5 per cent across Australia next year, with Perth leading the charge.
The prediction by Australian Property Monitors comes after interest rates were cut to their equal-lowest on record in hope of spurring the lacklustre economy.
It follows a weak period for the market, with median house prices falling last quarter.
According to a separate report, sponsored by the Real Estate Institute of Australia and Bendigo Bank, prices dipped 0.6 per cent in the three months to the end of September, compared with the previous quarter.
House prices have not grown over the past year, the report says.
However, the average price for other dwellings, including apartments, rose 1.2 per cent.
It says Melbourne is the third most expensive city for median house prices, at $530,000, behind Sydney on $641,890 and Darwin on $568,300. The lowest median was Hobart, at $340,000.
Institute president Peter Bushby said prices should improve next year.
APM senior economist Andrew Wilson said next year should continue to build on the modest gains recorded over the past year, when the median house price rose a mere 1 per cent.
He said record levels of immigration, housing shortages and soaring rents, as well as its exposure to the relative strength of mining sector, is likely to buoy the Perth market and send prices higher, possibly to an all-time high.
Prices in Brisbane are also expected to rise between 3 and 5 per cent next year after a poor result this year.