A property research firm has predicted that as long as banks return to “more reasonable lending standards”, five of the capital cities are on track for solid property price growth in 2019.
Hobart has been named as the city leading the way for growth in the next year, followed by Perth, Brisbane, Adelaide and Canberra.
Propertyology’s head of research, Simon Pressley, also said a number of major regional areas would experience price growth as well.
He added that a combination of market and economic factors meant locations could see double-digit price growth, but that number would increase if banks stopped “playing God with solid borrowers’ financial futures”.
The researcher looked at three possible scenarios: no change to credit conditions, a return to sensible credit policy in the first quarter and a return to sensible credit policy in the second quarter.
According to the research, with no change to policy Sydney house prices could drop by as much as 10% and in Melbourne by 8%. With a change in policy in the first quarter, the drop would be much slower, potentially levelling out Melbourne prices at a 0% move.
Cities like Brisbane, which is expecting a price increase of up to 3%, could see that figure rise to up to 6% if policy were to change in this first quarter. However, a change in policy in the second quarter would see this figure at 4%.
Hobart would reach double digits, with a possible 10% increase in prices with a policy change, compared to the 4% - 7% expected now.
Pressley said, “Hobart is again a no-brainer as the capital city expected to perform the strongest in 2019.
“The Tasmanian economy is a remarkable success story that has now spread right across the state. Launceston has the potential to be Australia’s property premiers in 2019 while Burnie and Devonport also will perform strongly.”
Pressley said that Perth could well be Australia’s best performing capital city in two to three years’ time.
“Don’t be fooled by the 2018 price fall of 2% in Perth because a large proportion of its former oversupply has been absorbed, vacancy rates have reduced from 6.9% to 3.3% over the last two years, and expectations for new job creation is now high,” he said.
“On a national level, our economy is looking better than it has for years with unemployment at 5.1%, the Federal Budget set to be in surplus for the first time in a decade, the economy growing, and our population set to increase by more than 350,000 again year,” he added.
“Interest rates aren’t expected to rise until 2020 at the earliest, plus the international student, tourism and mining sectors are all strengthening and creating even more jobs.
“There is a long list of big-picture, positive stuff, which collectively paints a very bright future.
“Believe the doom and gloom reporting if you wish, but I’m telling you that there will be locations that experience a property boom over the next few years.”