The current housing boom won’t come unstuck until 2018, according to SQM Research founder Louis Christopher.
He was described by the Australian Financial Review as “arguably the country’s most accurate forecaster.”
“It is now very likely it will be a strong start to the new year for Sydney and Melbourne, given the way 2016 ended,” Mr Christopher said.
He listed four reasons for the likely coninued growth as the continued low interest rate environment, strong Sydney and Melbourne economies, continued strong population growth and the supply side of the housing market.
The SQM forecaster expects capital city house prices to rise between six and 10 per cent this year, led by double-digit price growth in Sydney, Melbourne and possibly Hobart.
There will be single-digit growth in the other capital cities, apart from Perth and Darwin where he anticipates continued further falls.
Christopher believes both Sydney and Melbourne’s housing markets will be “dangerously overheated and overvalued” by 2018.
“The market will sustain its current momentum and rise again in 2017 – 2018 may be well another matter.”
Over the past two years, his predictions on capital city house price growth have been roughly in line with the Australian Bureau of Statistics’s Residential Property Price Index.
Mr Christopher believes a number of key macro factors will continue to push up prices this year.
These, he said, include the current low interest rate environment, continued strong population growth especially in Sydney and Melbourne and – until very recently – a weak response to the supply side of the housing market.
“We’re getting around 90,000 new people coming to both Sydney and Melbourne every year.
http://www.propertyobserver.com.au/forward-planning/investment-strategy/property-news-and-insights/63639-the-four-reasons-why-housing-will-boom-again-in-2017-in-melbourne-and-sydney-sqm.html