House prices are tipped to rise next financial year as Australia’s fastest population growth in two decades outweighs the effect of higher interest rates, an economic forecaster says.
House prices in Sydney will remain the highest in the nation.
“Australia is experiencing record net overseas migration flows which is underpinning what is already strong underlying demand for housing,” the report said.
BIS Shrapnel study author Angie Zigomanis said rising rents and improving credit conditions would cause house prices to increase in most capital cities.
“As credit conditions recover over the course of 2009, we expect banks will gradually pass on lower borrowing rates to customers,” Mr Zigomanis said.
Perth’s forecast median house price of $500,000 by June 2011 would be overtaken by Darwin’s $515,000 as the Northern Territory capital was anticipated to enjoy 21 per cent house price growth during the next three years.
“This easing will enable house price growth to pick up in many centres during 2009/10 and 2010/11.”
Residential property markets would experience marginal price increases in 2008/09 as the population was expected to grow by 1.5 per cent, its highest level since the late 1980s.
Median house prices in Queensland were expected to grow strongly in the three years to June 2011. Brisbane, Gold Coast and Sunshine Coast properties were tipped to enjoy a nation-leading 22 per cent growth.
Sydney, was tipped to have the nation’s highest median house price, of $650,000, by mid-2011 as real estate values were expected to climb by 18 per cent during the next three years.
The resources boom city of Perth was predicted to post the slowest capital city median house price growth, at nine per cent, in the three years to mid-2011.
Melbourne and Adelaide median house prices were tipped to grow by 16 per cent to June 2011, followed by Canberra’s 15 per cent.
Hobart house prices were tipped to rise by 14 per cent by June 2011, but would still give the city Australia’s lowest median capital city house price, of $365,000.
An Indian man walks into a bank in
New York City and asks for the loan officer.
He tells the loan officer that he is going to India on business
for two weeks and needs to borrow $5,000.
The bank officer tells him that the bank
will need some form of security for the loan,
so the Indian man hands over the keys
and documents of new Ferrari parked
on the street in front of the bank.
He produces the title and everything checks out.
The loan officer agrees to accept
the car as collateral for the loan.
The bank’s president and its officers
all enjoy a good laugh at the Indian
for using a $250,000 Ferrari
as collateral against a $5,000 loan.
An employee of the bank then
drives the Ferrari into the bank’s
underground garage and parks it there.
Two weeks later, the Indian returns,
repays the $5,000 and the interest,
which comes to $15.41.
The loan officer says,
“Sir, we are very happy to have had your business,
and this transaction has worked out very nicely,
but we are a little puzzled.
While you were away,
we checked you out and found that you are a multi millionaire.
What puzzles us is, why would you bother to borrow “$5,000” ?