In the next year, many capital cities will see double-digit price increases. Hobart and Brisbane are the leaders.
According to Propertyology’s latest market forecast, Brisbane has the potential to clock house price growth of more than 25%, while Hobart is expected to record gains of more than 20%.
Adelaide and Canberra should finish 2022 with house prices that are at least 15% more than 2021.
Perth could see gains in excess of 10% during this time.
The growth in Sydney and Darwin will be slower. Melbourne will likely see the least growth over 12 months.
Propertyology head of research Simon Pressley said Australia is just two years into the “lifestyle movement” era, which has already seen an unprecedented volume of people with a desire to move.
“It will produce the highest rates of relocations and home upgrades in human history,” Mr Pressley said.
Markets such as Adelaide, Brisbane, Hobart and Canberra have the conditions to achieve between 30% to 50% capital growth in the next two years into the “lifestyle movement” era ending 2023.
Pressley said that Brisbane would rise again after its 15 year hiatus. He also claimed that Brisbane would be the focus for the next few decades.
“The economy of Australia’s third largest city is still not as strong as many other locations and commentary about internal migration and infrastructure investment is grossly exaggerated,” he said.
“But the overall conditions are such that we anticipate growth of 25% to 30% in 2022, the strongest Brisbane will have seen since 2003.”
Hobart will maintain its strong growth prospects. It has been the largest market in terms of performance for the past seven years.
“Tasmania has become home to the most precious real estate in the country — Hobart currently has 70% less resale supply than five years ago and only 97 dwellings advertised for rent,” said Mr Pressley.
Regional Australia will remain as the biggest beneficiary of the current “lifestyle movement” era.
Pressley stated that many regional capitals have stronger local economies. These capitals also have higher levels and tighter housing supply.
“During the first 12 months of COVID-19, the population of regional Australia increased by 51,000 whereas the eight capital cities produced a combined 17,000 decline,” he said.
These optimistic projections will be based upon an expected increase of the economy in this fiscal year.
Pressley stated that Australia is close to full employment for the first time in decades.
“Borders are re-opening, the number of jobs currently advertised is through the roof and there is insufficient skilled labour to fill positions,” he said.
“We are on a trajectory for the highest rates of wage growth in 15-years.”
“And Australia has just started its biggest ever infrastructure boom — 430 projects worth $218bn are due be completed by 2025 while businesses are forecast to invest $200 billion in 2022.”
Pressley stated that while there are expectations for an increase of interest rates, the cost of borrowing credit will remain at its lowest level in many generations.
“An overwhelming majority of mortgage holders have been paying well above the minimum loan repayment for a long time,” he said.
“Australian households have $240bn in cash reserves, mostly squirrelled away in offsets and redraws.”