BIS Shrapnel has disputed the idea of a property market crash, and has forecast that house price growth will begin to accelerate within the next two years.
In the company's Residential Property Prospects 2012 to 2014 report, BIS Shrapnel has predicted the housing market will see moderate price growth over the two years to 2013, and has claimed some capital cities will even see double-digit price growth over the three years to June 2014. Although the company conceded the market has seen recent declines, BIS Shrapnel senior manager Angie Zigomanis said a variety of factors will come together to arrest any further decreases.
""Economic growth is forecast to regain traction through 2011, and continue to accelerate in 2012 and 2013 as resources investment flows through to the rest of the economy,” Zigomanis said.
Though recent ABS figures have indicated that 2010 saw slowing population growth, Zigomanis predicted that growth will rebound, stimulating housing demand.
“Strengthening employment growth – the unemployment rate is forecast to fall below 4% in 2013 – will also see net overseas migration inflows turn around, and the underlying demand for new dwellings begin to rise,” he commented.
BIS Shrapnel has also predicted a return of first home buyers to the market. Its report suggested that first time buyer participation would return to long-term averages.
“Potential first-home buyers will not stay out of the market forever. At some point many will reach a life stage where they will want their own dwelling. If higher interest rates mean they can’t afford their first choice of dwelling initially, then they will purchase a more affordable type of dwelling and/or in a more affordable neighbourhood. In any event, this period will allow future first-home buyers to build up their deposit and take advantage of softer house prices,” Zigomanis said.
Last year, BIS Shrapnel's Residential Property Prospects 2010 to 2013 report predicted median house price declines would not come to pass, saying investors would spur activity in the market.