SQM Research predicts that the revival of Sydney’s home market will transform into a “boom” in 2014, with price growth expected to be more than double the rate seen in Perth, Australia’s second best performer in the residential property market.
According to the researcher’s annual Housing Boom and Bust report, the housing market of Sydney will benefit from low interest rates and a rebound in consumer confidence, which will result in a jump of between 15% and 20% in property values. By comparison, property prices in Perth are forecast to show more modest growth of 4% to 8%.
On average, house prices across Australia’s biggest cities will display an increase of between 7% and 11% next year, SQM Research said. Its forecast is based on a rise in interest rates in the second half of 2014. This year, residential property values are expected to climb by up to 9%, according to the report.
SQM Research managing director and lead author of the report, Louis Christopher, said that the recovery of the country’s residential market started in the third quarter of 2012 and is about to accelerate. First-home buyers, who generally failed to take advantage of this revival, are expected to benefit from state government concessions to buy a new home next year, he added.
Christopher also noted that the rate of improvement will vary in different cities, with some failing to exhibit buoyant growth. Canberra, for instance, will most likely see values dip by 1% to 4%, while Melbourne will score a modest price increase of between 4% and 7%.