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Brisbane is forecast to be the only capital city not to experience a decline in median house prices in real terms over the next three years.
The BIS Shrapnel Residential Property Prospects 2015 to 2018 puts Brisbane’s current estimated median house price at $520,000, which, in real terms, is still below Brisbane’s June 2010 peak. Coupled with low interest rates, Brisbane’s affordability is at levels not seen since the early 2000s.
The report also predicted a total rise of 13% in the Brisbane median house price, with the median unit price forecast to rise by 6%. Nationally, it is expected that low interest rates will support further price growth in undersupplied residential markets in 2015/16, but the possibility of tightening interest rates and the decline in affordability will create conditions for price declines in a number of cities from 2017.
According to the company’s report on Residential Property Prospects, 2015 to 2018, it is estimated that both Sydney and Melbourne have seen double-digit percentage rises in their median house prices in 2014/15, and with affordability deteriorating, this is becoming a concern. In contrast, weaker recent price growth in the other capital cities means that affordability is not as strained.
Increasing demand from owner occupiers, together with the stimulatory effect of variable interest rates at more than 40-year lows, is expected to support median house prices in most capital cities over 2015/16, with the strongest conditions forecast for New South Wales, Queensland and Victoria, where the markets are currently in overall deficiency.