Property prices forecast to soar in 2010

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Despite fears of higher interest rates and the slowing effect of the first homeowners grant boost coming to an end, property prices are expected to keep on growing well into 2010 according to an expert.

Matthew Bell, economist with the Australian Property Monitors said property owners will continue to see their investment grow in the new year with house prices already exceeding pre-global financial crisis levels nationally by nearly 3%, and this growth is expected to continue.

"The phasing out of the first home owners grant boost has had a little effect on the lower-end of the market in the last quarter of 2009, and although interest rates are rising, this is not expected to affect prices until late 2010 and possibly 2011," he said.

Bell also noted that despite the recent strong growth in values, there are still many affordable options available for property investors.

"If you are looking to enter the market, participate in the national recovery and get the best 'bang for your buck', Brisbane and Perth are the places to be looking," said Bell. "Queensland and Western Australia's increased exposure to the downturns in both the resource and tourism sectors have meant that the price recovery for both houses and units has trailed other states. However, it's important to move now, as prices are likely to recover in early 2010."

Bell added that while Sydney and Melbourne has recorded stunning growth this year, there are still opportunities to grab a bargain in these cities, including suburbs such as Mona Vale, Woolloomooloo, Toorak and Hawthorne.

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