Katie McDonald – BNW
Perth’s house prices are forecast to grow by 3 per cent over the next three years, according to QBE Insurance Group’s latest Housing Outlook Report for 2017-2020.
Released today, the QBE- commissioned BIS Oxford report forecasts that the majority of Australia’s cities will experience house price growth, with just Sydney’s house prices expected to flatten (-0.2 per cent) by 2020.
It is estimated the excess in dwelling across Western Australia to be 24,900 in June 2017 will be one factor along with subdued economic conditions that will help keep prices in check, predicting Perth’s median house price to jump slightly to $535,000 by June 2020, which represent cumulative growth of 3 per cent over the next three years.
Unit prices, including all forms of multi-unit dwelling such as townhouses, villa units, semi-detached dwelling, terraces, flats and apartments are forecast to decline by less than 1 percent to $400,000.
The median unit price fell by 7.6 per cent in the three years to June 2017, at $402,200 and during this time the report found the share of unit completions increased from 20 percent to 30 per cent of total dwelling completions.
The report’s overall outlook was that Perth’s house prices would stabilise, with the market close to the bottom as of 2018/2019.
QBE Lender’s Mortgage Insurance CEO Phil White said that while unit prices would soften, he saw this part of the residential sector playing a growing influence on the nation’s property market over the coming decades.
“With so many Australian priced out of the housing market, the Australian Dream of owning property is increasingly turning to high and medium density apartments, ‘Mr White said.
“Units contribute to a greater share of the market as changing lifestyles and affordability dictate property choices.
“Encouragingly, that dream should become a reality for more Australians, with improving affordability overall”.
According to the report, units ow account for 46 per cent of all residential construction across the country.
“With more lending restrictions impacting investors, it could be good news for owner occupiers as they should find less competition from investors, “Mr White said.
The report also found that first home buyer loans declined by less than 1 per cent in 2016/2017.
However, overall signs of strengthening demand for first home buyers were emerging with 13 per cent more loans approved to first home buyers to the three months to July 2017 compared with the previous year.
Mr White said around 6.5 million people would need to be housed over the next 15 years.
“The forecast population growth raises questions about whether our property market will have us on track to meet short, medium and long-term population challenges, “Mr White added.
“Careful planning for housing stock and infrastructure is imperative.”