BIS Shrapnel: House prices rising

by BN15 Jun 2009

First home buyers have provided the first green shoots of housing market recovery, but it will be investors that carry the torch in the coming year, predicts BIS Shrapnel.

BIS Shrapnel's Residential Property Prospects report indicates activity from first home buyers has kick-started a slow recovery to the housing market. According to the report, average house prices in most capital cities from 11 to 19% over the next three years (inflation adjusted percentage growth is about half).

BIS Shrapnel's Angie Zigomanis said there's enough activity in the market to become self-sustaining once the first home owners grant expires at the end of this year.

"From here, the recovery in housing demand is expected to broaden and deepen," said Zigomanis. "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.

"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. In many instances, rental returns are now running close to mortgage repayments."
However, other analysts have stated unemployment, weak growth and credit policy tightening will put downward pressure on house prices.

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  • by SteveOZ 16/06/2009 3:56:49 PM

    Time to be careful of Sheeple in Wolves clothing. The property and share markets will make a nice comeback over the next 6 months and then kaboom - BUST big time.

  • by Broker 16/06/2009 5:47:12 PM

    All ords was 3200 in Jan, what's changed , mmm not much, but it's now 4000, be careful I is no different, all a risky business at the moment.

    Still many questions to be answered, which will be over the next 6 -12 months.

    A 20% rise in property , coupled with the current housing affordabilty index, and 8-8.5% unemployment, very hard to imagine me thinks.