Perth’s house prices are forecast to grow by 3 per cent over the next three years, according to QBE Insurance Group’s latest Housing Outlook Report for 2017-2020.
Perth’s house prices are forecast to grow by 3 per cent over the next three years, according to QBE Insurance Group’s latest Housing Outlook Report for 2017-2020.
Released today, the QBE-commissioned BIS Oxford report forecasts that the majority of Australia’s cities will experience house price growth, with just Sydney’s house prices expected to flatten (-0.2 per cent) by 2020.
Perth’s median house price fell by 14 per cent in the three years to June 2017, to $520,500, according to the report, with the largest decline taking place in the middle ring suburbs (-9.2 per cent), followed by outer ring suburbs (-6.2 per cent) and inner (-5.7 per cent).
Continuing subdued economic conditions, plus the excess number of dwellings across Western Australia (24,900 in June 2017), will combine to help keep prices in check, the report said.
Perth’s median house price is expected to increase to $535,000 by June 2020, which represents cumulative growth of 3 per cent over the next three years.
Unit prices, including all forms of multi-unit dwellings such as townhouses, villa units, semi-detached dwellings, terraces, flats and apartments are forecast to decline by less than 1 per cent to $400,000.
The median unit price fell by 7.6 per cent in the three years to June 2017, at $402,200 and during this time the report found the share of unit completions increased from 20 per cent to 30 per cent of total dwelling completions.
The report’s overall outlook was that Perth’s house prices would stabilise, with the market close to the bottom as of 2018-19.
Demand for units across Australia was predicted to weaken largely due to tighter investor lending standards, highlighted by the report as a large factor impacting investors.
QBE Lenders Mortgage Insurance CEO Phil White said while unit prices would soften, he saw this part of the residential sector playing a growing influence on the nation’s property market over the coming decades.
“With so many Australians priced out of the housing market, the Australian Dream of owning property is increasingly turning to high and medium density apartments,” he said.
“Units contribute to a greater share of the market as changing lifestyles and affordability dictate property choices.
“Encouragingly, that dream should become a reality for more Australians, with improving affordability overall.”
According to the report, units now account for 46 per cent of all residential construction across the country.
“With more lending restrictions impacting investors, it could be good news for owner occupiers as they should find less competition from investors,” Mr White said.
The report also found that first home buyer loans declined by less than 1 per cent in 2016-17.
However, overall signs of strengthening demand for first home buyers were emerging with 13 per cent more loans approved to first home buyers to the three months to July 2017 compared with the previous year.
Nationally, Mr White said, about 6.5 million people would need to be housed over the next 15 years.
“The forecast population growth raises questions about whether our property market will have us on track to meet short, medium and long-term population challenges,” he said.
“Careful planning for housing stock and infrastructure is imperative.”
