QBE's Australian Housing Outlook 2015-2018 released today presents an overview of the Australian housing market and forecast trends over the next three years across each capital city and nine key regional centres in New South Wales, Victoria and Queensland.
For the first time, median prices in this year’s report are forecast for both houses and units, with additional commentary on regional centres.
QBE LMI Chief Executive Officer Phil White said: "After expanding the coverage of the Outlook last year, we received extremely positive feedback about the value of looking at the housing market on this more granular level.
"By again increasing the scope this year, we're looking to provide an even more in depth outlook for Australia's residential markets, including insights into the pricing of units, which we know for today’s owners and buyers are often just as relevant."
Now in its 14th year, the annual BIS Shrapnel-prepared report confirms Sydney and Melbourne as the standout performers in the current residential cycle, with prices driven mainly by investor purchasers who represent 50% of the national market.
Sydney's median house price reached $1.034m at June 2015 and is forecast to rise to $1.11m by mid-2016 before decreasing to $1.055m by June 2018.
In Melbourne, a marked slowdown in the rate of price growth from the previous two years should see the median house price increase by a moderate 5% to $770,000 by June 2016.
Mr White said: "The report forecasts that Brisbane's continuing affordability will see it attain the highest growth rate of all capital cities over the three-year period, resulting in a median house price of $575,000 in 2018, which will be 12% above the median house price of $511,300 in June this year."
BIS Shrapnel's research forecasts the Perth market will weaken across both houses and units due to a rising stock surplus and the slowing state economy, with an expected 10% decline in the median house price in 2018 compared to the June 2015 level.
Looking to the future, the report forecasts demand in some markets over the next 12 months to ease, with the exception of Sydney (7% increase), Melbourne (5% increase) and Brisbane (5% increase).
Perth and Darwin will feel the impact of a softening economy, which will further reduce demand, resulting in a correction in median house prices. Darwin, Perth and Adelaide are all expected to see shallow growth. Hobart and Canberra are forecast to experience some stability after prior weakness, with interstate migration flows expected to improve.
BIS Shrapnel's research predicts there will only be a mild correction to median house prices during the forecast period of 2015-2018 in Perth and Darwin, with compound growth in median house prices in all other capital cities: Sydney, Melbourne, Adelaide, Hobart and Brisbane. A number of regional cities are forecast to outperform the capital city in their state.
A copy of the QBE Australian Housing Outlook 2015-2018 is available at www.qbelmi.com or www.qbe.com.au.
For further information please contact:
Phone: 02 9239 7818