Growth in Australian house prices will pull-back to single digits, a new report has claimed.
The Australian Residential Development Outlook released yesterday, compiled by the Property Council of Australia and Corelogic RP Data, says that an increase in housing supply will put the brakes on rising house prices.
“In a welcome change for those looking to buy a home, the heat is expected to come out of housing price rises over the next year, as record supply begins to soak up the excess demand that has been there for some time,” Tim Lawless, CoreLogic RP Data head of research said.
“Again the growth in rental and new housing prices are largely centred around Sydney and Melbourne, but the expectations are that growth will come down from the double digit heights experienced in these cities over the past 5-10 years.
“Housing prices across capital cities are shown to have risen by 57 to 138 per cent in the five year period to 2005, and once they did that they went on to post 23 to 84 per cent gains in the next five year period. However, it is fair to say that the days of a 15-30 per cent improvement in national house prices per year are now past.”
According to the report, the expectations for low interest rates, reasonable ongoing foreign investment and an increasing population will drive a fundamental demand for new homes to be built through 2016.