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Strong demand from first home buyers will generate green shoots of recovery for the wider property market in 2009-10, with prices tipped to rise by close to 20 per cent by 2012, a new report says.
BIS Shrapnel’s Residential Property Prospects 2009-12, released today, says conditions are ripe for a sustained recovery in the residential markets, with low interest rates, solid rental growth and housing shortages evident in most areas.
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While BIS Shrapnel expects the first home buyer boom to ease at the end of the year it anticipates up-grader and investor activity to take over.
“By the end of 2009, strong turnover of the most affordable properties will be flowing through into the bulk of households positioned towards the middle of the market, as people who have sold their existing dwellings to first home buyers upgrade to their next home,” BIS Shrapnel senior project manager Angie 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, BIS Shrapnel forecasts Sydney, Melbourne and Adelaide to show the strongest price growth of 19 per cent.
Canberra, Brisbane and Hobart are expected to see price increase of 17, 16 and 15 per cent while Darwin and Perth will be more sluggish, with growth of 11 and 12 per cent respectively.
