PERTH, Sydney and Adelaide are predicted to be the country's strongest housing markets in the next three years, as a lack of economic confidence in Queensland is expected to prohibit capital gains in Brisbane.
But while the country is unlikely to see the soaring capital gains of 50 per cent over two years experienced around 2003 in markets such as Sydney, a crash is not predicted by industry analysts, The Australian reports.
They rejected warnings issued last week by the International Monetary Fund that Australia had a property bubble as a leader in the world for household debt and unaffordable housing.
According to the QBE LMI Australian Housing Outlook report researched and written by BIS Shrapnel, home price increases of about 20 per cent on average are predicted in Sydney, Perth and Adelaide through to 2013.
More modest house price growth is expected in the three years to June 2013 in Brisbane, where prices will rise 15 per cent.
Hobart prices are expected to increase 13 per cent, Darwin 12 per cent, Canberra 12 per cent and Melbourne will lag the country with 9 per cent increases after strong house price gains in the past year.
Sydney couple Liesel Cole and her husband, Brody Petersen, both 32, have just purchased an unrenovated three-bedroom terrace in Bondi for $1.375 million.
They believe they will make about $400,000 if they renovate and sell the property in three years, regardless of the capital gain predictions.
Ms Cole, a mother of one in marketing, and Mr Petersen, the owner of a local restaurant, now have their current home for sale and also hope to make a $200,000 capital gain on the two-bedroom seaside apartment they purchased two years ago for about $700,000.
"From watching (the market) for many years, I think it is an ever growing market in Sydney," she said.
"In Bondi, I don't think you are ever going to lose money . . . Bondi prices are astronomical."
Ian Graham, the chief executive of QBE Lenders Mortgage Insurance, said some banks had relaxed their loan-to-value ratios from 90 to 95 per cent after first-home buyer demand had eased.
BIS Shrapnel predicted the strong resources sector, triggering a greater labour demand, would push interest rates to 9.1 per cent in 2013, and this would cause an annual decline in property prices of about 10 per cent across major city markets.
Read more: http://www.news.com.au/money/property/dont-expect-property-crash-anytime-soon/story-e6frfmd0-1225937886363#ixzz12CEFYJUM
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