All Australian capital cities are tipped for positive housing market growth over the next two years, according to Domain Group.
Median unit and house prices in the combined capital cities will go up by 6 per cent and 8 per cent respectively in 2020.
While it is still expected to be in growth territory in 2021, the increases are predicted to slow slightly to 3-5 per cent for units and 5-7 per cent for houses.
Out of all the capital cities, property prices in Sydney and Brisbane are tipped to surge the most.
In Sydney, unit prices are anticipated to rise by 8 per cent while houses could soar by 10 per cent.
That double-digit growth could mean Sydney’s median house price will be nearly $1.25 million by the end of the year. This beats the market peak in June 2017 by 3 per cent.
In 2021, house price growth in the Harbour City could ease to 6-8 per cent, while unit price growth is predicted to curb to 3-5 per cent.
Right now, the median unit and house price in Sydney is about $735,000 and $1.14 million respectively.
With Sydney and Melbourne’s sky-high prices pushing property hunters away, interest in the Brisbane market means house prices there could approach $620,000 by the end of 2020, rising by 8 per cent. If this happens, it would be the first time for Brisbane’s median house price to tip past the $600,000 mark.
Unit prices in Brisbane are also expected to fare well and are tipped to climb by 6 per cent in 2020, after seeing a fall of almost 10 per cent from the peak in 2016.
Brisbane buyers today can expect to pay some $377,000 for a unit and about $577,000 for a house.
The coveted million-dollar club could soon be welcoming a new member, with the median house price in Melbourne forecast to hit $1 million by 2021. Currently, only Sydney has a median house price above $1 million.
A typical house in the Victorian capital is about $902,000 today, which is expected to go up by 8 per cent in 2020.
Unit prices in Melbourne, which are currently about $550,000, are expected to see growth of 5 per cent this year.
Domain Economist Trent Wiltshire said property values “should” grow strongly in most Australian capital cities in the next two years.
“Very low interest rates, and the expectation that interest rates will remain low, will be the key driver of rising property prices in 2020,” he said.
“Strong population growth, a slowdown in new housing construction, low levels of listings and the First Home Loan Deposit Scheme will also contribute to higher prices.”
“In addition, rising market sentiment and a jump in buyer demand, shown by rapid growth in mortgage lending and also more people viewing property listings, will also push up prices.”
Mr Wiltshire noted that prices are continuing to climb on the back of rapid property price surges at the end of 2019.
“We’re forecasting Sydney and Melbourne prices to rise rapidly in 2020, but price growth should moderate in 2021,” he said.
“Brisbane should see strong house price growth over the next two years and unit prices will also start rising again.”
House price forecasts
Unit price forecasts
Source: Domain Group