Property prices in Australia’s capital cities are on the rise again after a two-year slump. Australia’s two biggest housing markets, Sydney and Melbourne, recorded quarterly growth of 6.2% and 6.4% respectively to 30 November, according to CoreLogic’s Hedonic Home Value Index.
Nationally, house prices surged 1.7% higher over November 2019 and delivered the fifth consecutive monthly increase, coupled with the largest monthly gain in the national index since 2003.
But will house prices in Australia continue to rise? The Australian property forecast for 2020 looks promising. Here’s a city-by-city breakdown of Australian property market predictions.
Sydney property forecast 2020
Sydney house prices grew by 2.7% over the month to 30 November, continuing a five-month recovery trend and finishing the quarter strongly at an increase of 6.2%.
Looking forward to 2020, further price growth is expected to be underpinned by low interest rates, stronger population growth and ongoing low unemployment (4.5% in NSW and even lower in Sydney).
House prices in Sydney are expected to grow by 3-5% during the year, with apartments not far behind at an expected growth rate of 2-4%, according to Domain research.
For those thinking of selling property in Sydney, 2020 could be the right time to go to market as auction clearance rates hold steady. Buyer sentiment is also expected to be positive, with home loan borrowing tipped to grow by 2% over the year.
Melbourne property forecast 2020
Melbourne recorded the highest price growth of any capital city over the quarter to 30 November, with housing values increasing by 6.4%, according to CoreLogic’s Hedonic Home Value Index. Melbourne house prices grew by 2.2% over the month of November, the third-largest increase across Australia’s capital cities, behind Sydney and Hobart.
In 2020, house prices in Melbourne are expected to increase by 1-3%, with apartment prices projected to see modest growth of up to 2%, according to Domain.
Similar to Sydney, Melbourne property prices will be boosted by lower interest rates and strong population growth of about 2%. The unemployment rate is also expected to fall in the year ahead, potentially driving up buyer interest. A slowdown in new housing construction will also support price growth as housing stock becomes limited in line with increasing demand.
Brisbane property forecast 2020
Brisbane house prices saw a modest increase of 0.8% over November and 1.8% over the quarter to 30 November, according to CoreLogic’s Hedonic Home Value Index. Growth in the city has predominantly been driven by properties at the top end of the market, which are outperforming lower-value properties.
Moving in 2020, property prices in Brisbane are expected to increase by 3-5%, while apartment prices are tipped to rise by up to 2%, according to Domain. The modest growth of apartment prices is in part due to an overstock of supply, despite the Brisbane apartment construction boom coming to an end.
Its relative affordability has made Brisbane and south-east Queensland an attractive prospect for buyers and contributed to strong interstate migration. This trend is expected to continue in 2020, with annual population growth remaining at 1.75%.
Low interest rates and a lower Australian dollar will also boost the Queensland economy and property prices.
Perth property forecast 2020
After a tough five-year downturn, Perth property prices are finally on the up, recording a 0.4% increase in November, according to CoreLogic’s Hedonic Home Value Index.
Although property prices in Perth are still below their 2014 peak, both houses and apartments are expected to increase modestly in value by up to 2%, according to Domain research.
There are a number of factors driving a potential turnaround for Perth real estate. Annual population growth is predicted to increase to 1.5% in 2020 from 0.9% in 2018, which will in turn increase buyer demand.
Home loan interest rates are also lower, the Australian dollar has fallen, unemployment is expected to fall and the mining industry may see its next boom – all of which could signal an increase in housing values in the year ahead.
Canberra property forecast 2020
According to CoreLogic’s Hedonic Home Value Index, Canberra house prices recorded growth of 1.6% over the month of November and 3.2% over the quarter, the third highest quarterly increase of any Australian capital city.
Throughout 2020, house prices in Canberra are expected to see strong growth of 4-6%, according to Domain research. Like Sydney and Melbourne, price growth will be supported by strong population growth and low unemployment.
Ongoing high levels of apartment construction will keep unit prices from rising too drastically, although they’re still expected to increase by 1-3% throughout the year.
As in other states, home loan borrowing is expected to increase moving into 2020, which could signal the right time to sell for tentative vendors.
Hobart property forecast 2020
House prices in Hobart saw strong growth of 2.3% over November according to CoreLogic’s Hedonic Home Value Index, an increase surpassed only by Sydney and Melbourne. Over the 12 months to November 2019, Hobart saw the highest annual growth rate of any Australian capital city at 4.2%.
Looking forward to 2020, house prices in Hobart are slated to grow by 2-4%, while apartment prices are expected to see strong growth of 3-5%.
Hobart’s property market will continue to be boosted by stronger population growth, investors looking for rental higher yields and the city’s tourism boom underpinned by more festivals, more exhibitions and an uptick in tourists visiting Tasmania.
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