A new study forecasts an increase of 5% this year for capital city house prices, thanks to strong growth in Sydney and Brisbane.
Data from the Australian Bureau of Statistics showed last year’s capital city home values were up 6.8%, prompted by the 12.2% climb in the average cost of Sydney real estate.
“Buyer confidence has been boosted with the Reserve Bank’s recent interest rate cut and we’ve seen a solid start to 2015 in most markets,” said Andrew Wilson, senior economist at the Domain Group which created the study.
“We are expecting buyer activity to remain solid through the autumn selling season and then moderate as we head into spring.”
Despite the predicted price increase at 5% for capital city houses, Sydney and Brisbane are expected to top this number with 8% and 6%, respectively.
“Sydney’s resilience is largely driven by its property shortages and economy, however investor activity remains at record levels and this is another key driver of the price growth being seen,” Wilson said.
Perth, Canberra and Darwin are facing the opposite predictions, as the study claims they are this year’s laggards once again.
“Declining local economies spell fairly modest growth of around 2% for Darwin, Canberra and Perth,” Wilson said.
“[Meanwhile], Melbourne, Adelaide and Hobart are in for another positive year, with moderate growth of between 3% and 5% likely.”
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