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New reports says housing market set for recovery

New reports says housing market set for recovery

July 02, 2011

Business research and forecasting company BIS Shrapnel has released a new report stating the housing market will begin to recover within the next two years.

The report firmly rejects the current speculation of an impending housing market crash and says the so-called housing bubble will not burst even though prices have seen a decline in recent months.

In its Residential Property Prospects 2012 to 2014 report, the company predicts moderate price growth between now and 2013 with some capital cities, such as Sydney, Perth and Brisbane, set to achieve growth into double-digit figures by 2014.

The report acknowledged the current sluggish state of the market but said the following factors would prevent further decline over the next few years:

  • Continued economic growth spurred on by the resources boom, which will have a flow-on effect particularly in Queensland and Western Australia where income growth is set to be the strongest
  • An anticipated increase in population growth, which has slowed since 2010
  • Continued high levels of employment. By 2013, unemployment is expected to fall below 4 percent and, combined with overseas migration increases, this will drive up the demand for new dwellings
  • First homebuyers will not stay out of the market forever. Even if interest rates are higher and house prices mean they have to move to a more affordable area and type of dwelling.

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