Perth Price Growth

“Price growth is forecast to be strongest over the next three years and exptected to record 19 per cent growth in Perth and Sydney” QBE LMI chief executive Ian Graham said. Solid income and population growth will be driven from substantial levels of investment in mining and resource capacity in Western Australia, creating robust demand for housing in Perth. Despite recording relatively unexciting growth this year, Sydney property prices could rise by as much as 20 per cent within the next three years. According to QBE LMI’s latest housing outlook, a growing deficiency in household dwelling supply will force property prices significantly higher over the coming three years. By 2014, QBE LMI expects property prices in Sydney to be 20 per cent higher than what they are today. In Sydney, the significant deficiency of residential dwellings is likely to continue to apply upward pressure on both rents and dwelling prices, attracting demand in particular from investors. Constrained affordability has resulted in little annual movement in prices in Sydney since 2004, with the exception of the 14.3 per cent increase in the median house price in 2009/10, which highlights the level of pent up demand that can be released as affordability and the economic outlook improves. Brisbane and Darwin are also expected to record strong growth in the three years to June 2014, with economists predicting 16 and 17 per cent growth respectively.

Interest Rates

Great News…

The Reserve Bank has decided to leave interest rates on hold!  At it’s
meeting today, the Board decided to leave the cash rate unchanged at 4.75
per cent.

Economists are divided as to whether rates will go down in the near future
or remain at the current rate, good news is that none at this stage are
anticipating a rise.

Conditions in global financial markets have continued to be very unsettled
with uncertainty increasing about both the prospects for resolution of the
sovereign debt and banking problems in Europe, and the outlook for global
economic growth.  While temporary impediments that had contributed to a
slowing in growth in some countries over recent months are lessening, recent
data suggest a continuing period of soft economic conditions in both Europe
and the United States.  Moreover, the uncertainty and financial volatility
have reduced confidence, which could result in more cautious behaviour by
firms and households in major countries.