Property prices in Sydney and Melbourne shows no sign of slowing down while prices in other cities fall, experts predicted.
Property research group SQM Research predicted that if the cash rate remains unchanged throughout the year, Sydney and Melbourne’s house prices could grow by 15 to 16 per cent.
Low interest rates will keep Sydney and Melbourne markets strong due to high income and population growth in these cities, said Moody’s economist Emily Dabbs.
“Affluent areas tend to be driven by the prosperity of local economy, and right now both Sydney and Melbourne have the fastest-growing economies in the nation,” said SQM managing director, Louis Christopher.
However, apartment prices in Sydney, Melbourne and Brisbane could fall by 15 to 20 per cent in the next two years, AMP capital chief economist Dr Shane Oliver predicted. “There’s a [supply] indigestion problem, but Sydney won’t have a supply problem for another two years,” Dr Oliver said.
On the other hand, Perth, Darwin and Adelaide’s prices are expected to continue falling due to dwindling population and high unemployment rate.
“The unemployment rate in Perth, for example, is quite high compared to the rest of the country,” said Dabbs. “That’s really hampering any income growth and making it difficult for households to pay higher prices for houses.”
Construction industry analyst BIS Shrapnel said house prices would rise in all capital cities except Perth and Darwin, and apartment prices would fall in Brisbane and Melbourne.