No end in sight to property boom, says analyst

June 2002

The real estate boom shows no signs of abating with house prices in the nation's capital cities likely to rise by up to 27 per cent over the next three years, according to research company BIS Shrapnel.

Property prices in Brisbane and Darwin will surge by 27 per gent and 24 per cent respectively, according to a new. BIS report. Melbourne's median house price is predicted to increase by 13 per cent- from $320,000 to $360,000 over the three-year period.

And despite softening demand, Sydney will cement its position as the nation's most expensive real estate market The median Sydney house price would rise by 22 per cent by 2005 - from $370,000 to $450,000 - pushing the city's prices more than 50 per cent above all other cities except Melbourne.

But with inflation taken into account, Australia's two weakest markets - Adelaide and Hobart -will both register a decrease in real house prices.

The report said the $14,000 first home-buyers grant for new housing had mainly affected the smaller capital cities, leading to an oversupply of stock and subdued prices.

The Government will drop the $7000 new housing component of the grant from July 1.

Some in the industry have called for the scheme's abandonment, and said its artificial impact on the market would be detrimental.