Australia’s overall capital city median house price was tipped to reach a record $1.16 million to $1.19 million.But Melbourne and Canberra were forecast to record the weakest growth, if not flatline.Almost every Australian capital city will hit record property prices in the next year, a new report has shown, as demand continues to outstrip supply.
But experts say a two-speed market is likely to persist, with Melbourne and Canberra house prices to record the slowest growth, if not flatline. “It’s been the chronic structural undersupply that’s been built over many, many years. We just haven’t met the needs of the growing population in terms of social housing and in terms of affordable housing, and that has continued to place pressure on price.”She said despite Melbourne predicted to overtake Sydney as the most populous capital in the next decade or so, its strong growth was not translating to higher house prices – yet.
He said changes to land tax in Melbourne had meant investors were increasingly pulling out of the market, creating more supply and keeping prices stable.“There’s been a notable rise in listings in Melbourne compared to other cities, that’s going to be a drag for some time to come through the next financial year. Part of that is the property tax changes, and property investors are thinking, ‘Well, this isn’t the place to be, I’ll invest somewhere else’.
HSBC chief economist Paul Bloxham said the smaller capitals had begun to catch up to the capitals in their housing markets after falling behind.