Housing oversupply and muted economic conditions are likely to be responsible for predicted flat or falling home prices in Australian cities over the next few years, a BIS Shrapnel report released in June this year forecasted. But two cities, the report suggested, were exceptions. Sydney and Brisbane.
According to BIS Shrapnel, known for its analysis and forecasts of the construction industry, these cities could escape some of the weakness because housing supply in those cities was limited and vacancies lower.
“By June 2017, only the Brisbane and Sydney markets are expected to have experienced any growth in house prices...,” the Residential Property Prospects 2014 — 2017 report warned.Angie Zigomanis, head of BIS Shrapnel’s residential research unit, calculates the total price growth in Sydney over the three years to June 2017 to be 10 per cent.
According to a report published in The Australian, prices in Melbourne were likely to fall by one per cent in three
years. Adelaide “remains a challenge”, with total growth of five per cent to June 2017, representing “a four per
cent decline in real terms.” Perth is also forecast to see a drop in real terms of six per cent in that time. Similarly, Hobart and Darwin will decline by five per cent and Canberra by six per cent in real terms.