House price growth predicted

HOMEOWNERS spooked by warnings of a property price bubble have been advised not to panic.

A healthy growth in house prices across the nation's capitals has been predicted for the next three years in a report prepared for mortgage insurer QBE LMI by analyst BIS Shrapnel.

Whether that growth flows on to the Northern Rivers and other reg-ions is more of a moot point.

Of the capitals, Sydney, Adelaide and Perth are seen as likely to lead the price growth spurt, according to the report, which tips median house prices to rise by about 20 per cent in the next three years.

Brisbane and Hobart are predicted to lag behind that, but growth figures of 15pc for the Queensland capital and 13pc for Hobart should be reasonably heartening for property owners there.

“Cities with constrained affordability and fewer pent-up demand pressures, including Darwin (12pc), Canberra (10pc) and Melbourne (9pc), will show the weakest price growth,” the report states.

BIS Shrapnel doesn't analyse regional centres smaller than Newcastle and Wollongong, and couldn't comment on predictions for towns like Lismore or Ballina.

When asked about the bullish forecasts, agent Gail Fuller said she was not seeing such a trend occurring in Byron Bay.

“It is mainly owner-occupiers who are buying and selling,” Ms Fuller said. “Very few investors are showing interest in the area and those that do are mainly looking at properties under $500,000.”

Ms Fuller said she felt the marketplace was changing.

“It's getting more volatile. We are going through periods of activity – tiny bursts of a couple of weeks and changing week-by-week,” she said.

Keith Jones, of PRDNationwide in Ballina, said he was confident about the future.

“It's still steady as she goes in some areas of the market. The top end has been the toughest, but it's starting to come back a bit,” Mr Jones said.

“People have seen that life goes on after the election and Australia has weathered the financial crisis pretty well. I would hope to see a 10 to 15pc growth over the next three years,” he said.

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