Wondering what your house could be worth in 3 years time by 2015?
Despite a slight decline in median house prices this financial year, the market is poised to turn around according to BIS Shrapnel.
The company today released a report titled Residential Property Prospects, 2012 to 2015.
With compounded increases, house prices are expected to rise by a little less than seven per cent in the next three years.
The study’s author, Angie Zigomanis, said there were a number of factors driving the turn around. According to him, population growth, low unemployment, and economic & income growth will drive the first stages of a turnaround should appear in 2012/13 before stronger price growth emerges in 2013/14 and 2014/15 as economic growth approaches a peak.
Mr Zigomanis said it was not too late for people to enter the property market.
“If you’re in a position to get into the market, the next 12 months presents a period where buyers will still be in a better negotiating position, after this it will then become more difficult for buyers,” he said.
Mr Zigomanis said while the report only went to mid 2015, he expected a change at the end of 2015.
“A lot of big mining projects will be in full swing and I think the Reserve Bank will become concerned with inflation pressures, so they’ll start to tighten interest rates again, so interest rates will start affecting affordability,” he said.
He said increased rents would convince some renters to buy a downsized property to the one they were renting or buy in a more affordable area as well as draw more investors into the property market.
While WA, New South Wales, Queensland and the Northern Territory will begin to show signs of recovery, Mr Zigomanis said conditions in the other states would continue to be dampened by underperforming economies and an excess supply.
Mr Zigomanis said the forecast growth in the next few years would not match the pre-global financial crisis boom period because the market was starting from a better position.
Here is his prediction on house price growth in the capital cities across Australia.