Talk of a crashing domestic housing market made headlines after international economists claimed a storm cloud was rolling in over Australian property prices.
But local analysts have crunched the numbers and say that over the next two years, house prices will not burst, rather linger.
The forecast is contrary to explosive claims by economist Jonathan Tepper, who is said to have predicted mortgage bubble bursts in both Ireland and the United States, that Australia would be the next nation to experience a shock housing crisis. But despite it’s convoluted name, the CoreLogic-Moody’s Analytics Australian Forecast Home Value Index has some simple insights to give
- Home values will continue to rise, even if only slightly, across most capital cities (after an initial correction this year for both Darwin and Perth).
- home value growth will likely slow across Australia in 2016 and 2017, following two years of “exceptional home value appreciation and double-digit growth” in many areas.
“On the outlook for the housing market nationally, we expect house price appreciation to slow in 2016. Our forecast reflects lower income growth as the Australian economy transitions away from mining-related investment, as well as the strong build-up of housing supply over the past two years,” said Alaistair Chan, a Sydney-based economist based at Moody’s Analytics.
“Nevertheless, accommodative policy, robust rental growth, and a recovering labour market are expected to support valuations over the medium term,” he said.
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