BIS Shrapnel Property Report 2015

“The Residential Property Prospects 2015-2018 report, released this morning by BIS Shrapnel, predicts the Coast’s median house price will jump 13% overall in the period to June 2018. That would see the average local home cost $630,000 in 3 years.”

“Brisbane will be the only capital city to match that growth — Melbourne and Hobart are next best at 4%.”


Summary of Report and Market Commentary :


South East Queensland

Brisbane and Gold Coast markets already on the way up through annual rises in value of 5% – 6% since year 2012 being fueled by an undersupply and inherent weak construction periods, continuing to drive prices forwards. There is a deficiency of dwellings in SEQ and require time to get subdivisions and apartment buildings up and running.

The market will be tight until supply comes online yet with another projected 1 million new residents coming into SEQ there is uncertainty as to how long this might take.

The 2018 Commonwealth Games could have a positive impact on Gold Coast utilising the Games as a springboard to help other sectors of the economy thus having a positive spin off onto property values.

In real terms, Brisbane prices are still below their previous high and the market is still pretty affordable at the moment. This affordability is expected to result in Brisbane finding itself ontop of the property ladder over the next three years with house prices tipped to lift 13% across the period.

The Gold Coast and Sunshine Coast (including Ipswich and Toowoomba) could have similar forecasts of 12% to 13% increase in value.

 

Melbourne

Melbourne is underpinned by unprecedented levels of migration from other states resulting in strong price growth in Melbourne in recent years.

Melbourne is also attracting a high percentage of new Immigration into Australia where Victoria is actually the strongest of all the states for in flowing new residents as a direct result of migration plus immigration.

A 5% rise over the coming 12 months will be followed by contractions in both of the following 2 years. In real terms, the tip is an anticipated 4% fall over the period for houses and a high 12% slide in the median price for units.

 

Sydney

The price growth of Sydney is tipped to slow over the next 12 months as affordability is pushed to the limit. Investor demand compounded by a lack of supply is tipped to carry the city to a 7% growth during the 2016 financial year.

Supply has a positive impact on Sydney but with upcoming completions in construction this will ease off demand and alleviate some of these pressures. This alleviation is expected to lead to a fall in values of 4% over the ensuing two financial years ending June 2018.

Resulting in an overall growth of 2% over the next three full years.

The BIS Shrapnel report argues that Sydney will see a 6% decline in real terms over this period to end June 2018.

 

Perth

Perth has experienced median house price decline over the past 12 months and this trend is likely to continue.

The mining and resources sector slow down is anticipated to continue to lead this slow down and reduction in dwelling values in and around Perth.

Over the next 3 years adjusted for inflation Perth will see a 10% decline over the coming 3 years with the market then balancing out.

 

Adelaide

There may be an oversupply in Adelaide driven by first home buyer incentives and the resultant lift in new home construction. This rise in construction is coinciding with the slowing underlying demand as net overseas migration inflows ease.

Only low interest rates could continue to put pressure on upward prices as the state face headwinds in a number of industry sectors. In real terms Adelaide is tipped to experience a median price drop of 7% across the next 3 years.

 

Canberra

Canberra has the highest incomes of the capital cities and affordability is not as strained as in other cities, possibly preventing any major property price declines.

However Canberra has an expected long-term oversupply position resulting in an anticipated flat market or a 5% decline in values is more likely once corrected for inflation.

With a real term 10% reduction on the cards for Canberra across houses and units according to BIS Shrapnel.

 

Darwin

A rise in population driven by the resources economy resulted in a rise of new dwellings being constructed. Investment in the resource sector is believed to have peaked in the NT having adverse effect on property values.

Once investment into large projects comes to an end, median house and unit prices are tipped to suffer.

A decline of 2% in the next three years will result in a real house price decline of 10% over the period and a 12% decline in real terms for Units

 

Hobart

On the back of recent growth in Sydney and Melbourne there is a potential upside if Tasmania experiences a net interstate migration inflow looking to take advantage of price growth at home and moving to Tasmania taking advantage of lower prices and a tree change lifestyle.

Hobart is also expected to suffer from an oversupply of property thanks in part to first home buyers grants on new homes in Tasmania.

A 4% growth over the coming three years is anticipated but in real terms equating to a decline to the same figures with a 10% fall on unit median prices in real terms.

 

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