Angie Zigomanis, senior project manager with forecasting group BIS Shrapnel says he expects Australian residential properties to experience marginal price increases in the coming financial year as interest rate rises halt price growth rather than force a downturn.
He says that rising rents and improving credit conditions will be the key to the next upturn in prices in most capital cities. “As credit conditions recover over the course of 2009, we expect banks will gradually pass on lower borrowing rates to customers,” says Zigomanis. “This will enable house price growth to pick up in many centres during 2009-10 and 2010-11.”
But the strongest growth according to Zigomanis will be in Brisbane, the Gold Coast, the Sunshine Coast and Darwin as a result of “significant pent-up demand in these markets and strong employment and wages growth, particularly in Queensland”.
Migration is playing a key role in the pent-up demand for housing. Australia is experiencing record net overseas migration inflows, which are underpinning what is already strong underlying demand for housing.
