Property Prices Set to Grow in Sydney and Perth
According to Rod Cornish, real estate strategist at Macquarie Capital, improved housing affordability in Sydney and Perth should result in property price growth of between 4 and 6 %.
However, Melbourne housing prices are expected to achieve a lower level of growth because property in this capital city is comparatively less affordable.
In good news for those seeking home loans in these markets, the affordability of housing in Sydney will fall to levels reflective of 2001, provided that the Reserve Bank of Australia reduces the cash rate two more times. A similar situation is predicted for Perth.
In the course of an interview with Australian Financial Review TV, Mr Cornish said, “Normally when you see affordability get to these levels you see a double-digit jump in prices, but given people’s lower propensity to spend, I think it will be single-digit growth.”
Mr Cornish explained that the lower price growth is expected for Melbourne properties because this is just one location riding out an over-extended cycle.