The median house price is forecasted to gain ground in Melbourne, rising to $940,000 by 2020, according to QBE’s Australian Housing Outlook 2017-2020 report.
House prices are expected to grow 10.2% from 2017 to 2020, whereas Sydney’s house prices are expected to decline -0.2% during the same period (dropping to a median of $1.178m by 2020).
The report also tips a 4.8% decline in Melbourne’s median unit price during this period, falling to $535,000.
These forecasts indicate a slowdown from the most recent financial year when the Melbourne median for houses rose 13.7% to $852,724, and the median for units rose 7.8% to $561,709.
QBE expects affordability to improve in Melbourne by June 2020, with the ratio of average household disposable income to mortgage repayments on a median-priced home dipping from its current 36.2% to 35.4%.
Dwindling housing supply and record population growth, spurred by high interstate and overseas migration, were the main drivers of Melbourne’s house price surge.
Of Australia’s capitals, Canberra is expected to lead in terms of house price growth in the next three years, with a rise of 16.3%. This is followed by Hobart (10.8%) and Melbourne (10.2%).
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